Credit conditionsfor Latin American corporates will remain pressured until 2017 amid headwinds shoredup by stunted global economic growth, Moody's said.
While some industrysectors are relatively well-positioned, others especially those in globally tradedcommodities are struggling, Paloma San Valentin, Moody's managing director of corporatefinance, said. Companies actively managing their financial flexibility, maintainingstrong liquidity and conservative capital structures are best positioned for theexternal challenges, San Valentin added.
Stronger economicperformance will cushion companies in Mexico, Chile and Peru, but those in Brazilwill suffer from the country's poor economy and political woes, Valentin noted.Argentina, meanwhile, is regaining business and investor confidence due to prospectsof a more market-friendly environment even though credit conditions are still difficult.
Valentine alsostressed the importance of business investor confidence in recouping credit conditions."The fragile confidence seen today, enhances the weaknesses and dependenciesof the region," she said.
Some of theexternal factors adversely affecting the region include China's gradual slowdown,a tightening U.S. monetary policy and weak economic conditions in Europe, Moody'snoted.