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Fitch puts Banco Azteca El Salvador national ratings under negative observation

Fitch Ratings placed Banco Azteca El Salvador SA's long- and short-term national ratings of AA(slv) and F1+(slv) on negative observation, following the announcement of the sale agreement for the banking operations of Grupo Elektra SAB de CV in El Salvador to Perinversiones SA de CV.

The agreement awaits authorization by El Salvador's banking regulator.

The negative observation on the ratings reflects the probability of a rating downgrade once the sale agreement is approved, since Banco Azteca would lose support from Grupo Elektra and would be assessed based on its intrinsic profile, which according to the rating agency is "below the level that the support allows it to reach on a national scale."

Fitch said the negative observation could be withdrawn if the transaction does not get approval by the banking regulator, in which case, the rating agency would affirm the ratings at their current level with a stable outlook.