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S&P affirms Fomento Económico Mexicano's A- credit rating, keeps stable outlook

S&P Global Ratings has affirmed its A- global scale credit rating on Fomento Económico Mexicano SAB de CV, or FEMSA, and maintained its stable outlook on the company.

The rating agency also affirmed its mxAAA long-term and mxA-1+ short-term national scale ratings on the Mexico-based retailer and bottler, which operates a convenience store chain in Mexico and controls Coca-Cola FEMSA SAB de CV.

It also said it affirmed its A- issue-level ratings on the company.

S&P based its stable outlook expectations on the expectation that FEMSA will "maintain solid financial performance in the next two years, despite challenging economic conditions, supported by its resilient operations, manageable debt levels, and ample liquidity."

FEMSA maintained an "intensive" expansion program, opening more than 1,360 Oxxo convenience stores, 99 drugstores and 79 gas stations during the 12 months ended March 31, the rating agency said.

S&P also expects for 2018 and 2019 adjusted EBITDA margins of between 13.0% and 13.5%, a debt-to-EBITDA ratio close to 0.5x and positive discretionary cash flow to debt above 25%.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.