Latin American corporate downgrades climb to post-pandemic high: Fitch

ISTANBUL

Latin American corporations' downgrade level climbed to the highest level in the post-pandemic period, Fitch Ratings said Friday.

The corporate downgrades exceeded upgrades seven-to-one in the fourth quarter of 2023, it said in a statement.

That level was recorded as the highest since the second quarter of 2020 in the midst of the coronavirus pandemic when downgrades exceeded upgrades by 14-to-one, it added.

"The downgrades were driven by weaker than expected leverage, business profile changes, environmental liabilities or (Environmental, Social and Governance) ESG-related matters, liquidity and refinancing risk," said the statement.

The rating agency said downgrades spanned various Latin American countries and sectors, but none were tied to negative actions on a sovereign rating.

The percentage of issuers that has a negative outlook rose to 14% at the end of the fourth quarter of 2023, from 7% the same period of 2022.