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Investing.com -- On March 25, 2025, S&P Global Ratings downgraded its long-term issuer credit and issue ratings on Grupo de Inversiones Suramericana S.A. (Grupo Sura) from ’BB+’ to ’BB’. The downgrade follows delays in the company’s leverage reduction process, as it reorganizes its investment portfolio to focus solely on the financial sector.
Grupo Sura is divesting its stake in Grupo Nutresa and increasing its participation in Sura Asset Management, with plans to spin off Grupo Argos by the end of 2025. However, the spin-off of Grupo Argos, the company’s last corporate subsidiary, is expected to prolong the leverage reduction process, with the loan-to-value (LTV) ratio consistently above 20%, indicating heightened financial risk.
The stable outlook reflects S&P’s expectation that Grupo Sura will maintain the LTV ratio above 20% and the cash flow adequacy ratio well above 0.7x, as it continues its ownership structure reorganization.
In 2024, Grupo Sura increased its debt to $1.6 billion, or 7.1 trillion Colombian pesos, marking a 19% rise from 2023, following transactions with Nutresa and Sura Asset Management. In 2023, the exit of Nutresa resulted in a 23% drop in the portfolio value, which was not fully compensated by the 18% value increase in the remaining subsidiaries by the end of 2024, leading to consistent LTV ratios of around 23% in 2023 and 2024.
The spin-off of Grupo Argos is expected to result in a loss of around 18% in Grupo Sura’s portfolio value, while the remaining investees will need to recover this loss. Consequently, the company’s leverage is projected to take longer to reduce below the 20% threshold organically, signaling an increase in financial risk.
Despite the portfolio restructuring, S&P anticipates a sustained flow of dividends from the investees. As of December 31, 2024, Grupo Argos represented 8% of the consolidated dividends. Therefore, the spin-off is not expected to significantly impact the dividends that Grupo Sura will receive. However, dividends paid to shareholders are projected to decline to around $132 million in 2026, following the exit of Grupo Argos.
Liquidity remains tight for Grupo Sura, but the company’s liability management strategies are expected to provide a cushion in the next six months. Following the divestment of Nutresa in 2024, Grupo Sura incurred an extraordinary tax liability of around $171 million, which is seen as the main source of pressure on its liquidity in 2025. The company maintains flexibility to adjust dividend payments to prioritize its liquidity position.
S&P could lower the ratings on Grupo Sura in the next six to 12 months if the liquidity position weakens due to a reduction in received dividends, an inability to refinance short-term debt or extend committed credit lines, a higher dividend distribution, or major unexpected obligations. Conversely, an upgrade could occur if the company achieves a stronger portfolio value or substantially reduces debt, leading to LTV ratios below 20% on a sustained basis, while maintaining adequate liquidity.
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