Fitch Ratings on Jan. 17 downgraded Panama-based Promerica Financial Corp.'s long-term issuer default rating to B+ from BB- while revising the outlook to negative from stable.
The rating agency also lowered the company's viability rating to "b+" from "bb-." Its short-term issuer default rating was affirmed at B.
The ratings action reflects Fitch's recent downgrade of Costa Rica's sovereign ratings. Costa Rica is the third Promerica Financial location to see a negative rating action from Fitch since November 2018, following Ecuador and Nicaragua.
Meanwhile, the negative outlook mirrors the same outlook on the sovereigns, reflecting challenges for the financial performance of the company's operations in these countries.
Promerica Financial's ratings reflect the group's consolidated risk profile and significant geographic diversification, which offset risks tied to weaker operating environments of its main subsidiaries and its comparatively higher risk appetite relative to peers. The company's main financial profile weaknesses include its tight capital position and significant double leverage, Fitch said.
The company's viability rating also considers the individual strength of its operations and the diversification of profits and dividend payments.