S&P Global Ratings on June 2 downgraded Consubanco SA Institución de Banca Múltiple's ratings due to the bank's underperforming liquidity ratios that lead to rising refinancing risk.
The rating agency lowered Consubanco's long-term global scale issuer credit rating to BB- from BB and its national scale issuer credit rating to mxBBB+ from mxA. The ratings were placed on CreditWatch negative.
Meanwhile, the short-term national scale ratings were affirmed at mxA-2.
S&P believes the bank's relative credit standing is no longer at par with its previous global and national scale ratings, as compared to peers. Failure of the bank to push through with a planned issuance could increase refinancing risk for the next 12 months, S&P said. The latest attempt from the bank to issue debt was in May with 500 million Mexican pesos out of an initial 750 million Mexican peso offer.
"Such a plan includes looking at secured and unsecured funding alternatives, which if successful would diminish liquidity pressures and improve its debt maturity profile," S&P said. However, it cautioned that the success of the offer "is dependent on market sentiment and confidence sensitivity to the bank."
As of June 1, US$1 was equivalent to 18.57 Mexican pesos.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.