Friday, 23 January 2009

S&P Cuts Vitro Ratings, Citing Cash, Sales Problems in Core Markets

Standard and Poor's last night cut Vitro SAB´s long-term ratings to CC from B-, with a negative outlook. As it did with Cemex, S&P spotted serious problems in Vitro's Spain, Mexican and U.S. operations. Vitro faces a ''very restricted cash flow and credit metrics,´´ according to S&P. Free cash flow was negative at the end of the third quarter, with $155 million of short-term debt maturities compared with $70 million in cash holdings. Let's remember that Vitro was one of the many Mexican companies involved in a credit derivatives scandal that forced them to realise hefty losses last year. The company lost $320 million from wrong bets in derivatives contracts. The company closed most open positions in derivatives in December.

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