2008-07-24 23:35:25 -

- A Fitch Ratings review finds that the majority of Latin American lower-rated speculative grade corporate issuers have manageable liquidity positions for the next 12 months.

Fitch reviewed 31 issuers rated 'B+' or below. Many of them benefited from unprecedented market liquidity during 2006 and the first half of 2007, issuing bonds that do not mature until after 2012. The ratings of a number of regulated companies in Argentina and the Dominican Republic have been constrained by the speculative grade credit quality of those sovereigns and their credit risk rating is greatly impacted by political, economic and other systemic risks of the government, rather than company-specific financial risks in many cases.

Not surprisingly the credits in the region

which are struggling are those that are closely tied to the U.S. automobile industry or those that do not have the ability to offset rising input costs with price increases. While debt rollover risk appears to be manageable for most of the companies in the report during the next 12 months, in the near-to-medium term cash flow from operations could come under pressure for many of the companies due to an expected slowdown in GDP growth rates. Fitch currently projects GDP growth in Latin America to decline to 4.1% in 2008 and 3.8% in 2009, from 5.2% in 2007.

During the first six months of 2008, approximately $5.1 billion of debt was placed by 11 Latin America issuers in the cross-border markets. This contrasts with $17.2 billion by 31 issuers of cross-border debt issuance during the first six months of 2007.

The full report titled 'To B or Not to B' is available on the Fitch Ratings web site at www.fitchratings.com. The report provides credit and liquidity analysis for each of the 31 issuers.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings, Chicago
Joseph Bormann, CFA, +1-312-368-3349
Daniel Kastholm, +1-312-368-2070
Brian Bertsch, +1-212-908-0549
(Media Relations, New York)