Intel stock spikes after report of possible US government stake
Investing.com -- S&P Global Ratings recently upgraded the credit rating of Alfa S.A.B. de C.V. from 'BBB-' to 'BBB'. The upgrade, announced on April 7, 2025, comes after Alfa completed the spin-off of its chemical subsidiary, Alpek S.A.B. de C.V. This change has simplified Alfa's business structure and improved its leverage, making its creditworthiness similar to that of its other subsidiary, Sigma Alimentos S.A. de C.V.
The ratings agency expects Alfa to maintain a leverage below 3.0x for the next two years, while continuing to receive upstream guarantees on its debt from Sigma. The stable outlook reflects the expectation that Sigma will continue to support Alfa's operating cash growth and maintain a prudent financial policy for the next 24 months, allowing for solid dividend payments to Alfa.
Following the spin-off, Alfa now relies solely on Sigma's creditworthiness. As of April 7, 2025, the Alfa group no longer consolidates Alpek after the establishment and public trading of Controladora Alpek, Alpek's new holding company. This positions Sigma as the driver of the group's financial position. Alfa will meet its administrative expenses, interest payments, debt maturities, and other obligations through the dividends it receives from Sigma.
Alfa's debt decreased by approximately $500 million and its total debt reached $700 million (down from about $1.3 billion) before the completion of the spin-off. The remaining $200 million portion of the debt (bank loans) is expected to see similar action in the second quarter of the year. S&P Global Ratings now views Alfa's financial debt as protected against debt repayment risk, given the expected sufficient cash balance and upstream guarantees.
Sigma, with greater visibility into its financial commitments at the holding level, recently announced a higher guidance for its capital expenditure (capex) for 2025 and 2026, seeking growth opportunities in Mexico and the U.S. The company is expected to post solid results and stable operating cash flow for the next 24 months, thanks to its resilient product offerings, pricing capabilities, broad geographic diversification, extensive supply chain and distribution network, efficient global sourcing, and prudent financial policies.
The stable outlook on Alfa reflects the outlook on Sigma, which is now the driver of the group's business and financial risk profile. However, S&P Global Ratings could lower the ratings on Alfa in the next 12-24 months if Sigma's financial position weakens, if Sigma's operating and financial performance deviates from current expectations, if Alfa weakens its liquidity position due to aggressive dividend distribution, or if Alfa takes on additional debt to fund the holding company-level projects.
An upgrade of Alfa in the next two years would require stronger-than-expected leverage and cash flow metrics from Sigma, while also covering the liabilities from Alfa. Sigma would also need to continue strengthening its business position, increasing its scale, and improving its profitability.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.