Grupo Avintia: Rating Report

DBRS Ratings Limited (DBRS) downgraded Avintia Proyectos y Construcciones, S.L. (Avintia PyC or the Company) to B (high) from BB (low) as a result of its more aggressive growth strategy focused on infrastructure projects, reduced segment diversification and weaker than previously forecast key financial metrics. DBRS then withdrew/discontinued the rating. Concurrently, DBRS assigned a new B (high) rating to Grupo Avintia, S.L. (Grupo Avintia or the Group), the parent company of Avintia PyC. The reason is that the parent company and its major subsidiaries have provided intercompany guarantees, and thus DBRS treats them as a consolidated credit and will use Grupo Avintia as the main reference point for the ratings. Based on a Recovery Rating of RR3, which reflects a substantial anticipated recovery of between 60% and 80% of the current outstanding balance of the EUR 50 million 4.0% Senior Secured Notes (the Notes), the Notes were confirmed at BB (low), which is one notch higher than the Issuer Rating. It is noted that EUR 14.9 million of the Notes was voluntarily repaid in December 2018 such that the outstanding balance as of 31 December 2018 was EUR 35.1 million. The trends on all ratings are Stable.