Prosegur is an Spanish issuer classified in the commercial services and supplies sector. The company has a score of 8 (in a scale from 1 to 10), thus it is a laggard in its industry. We have discussed this case with the credit team in order to determine what where the main negative contributors to its score.
For a company operating in the private security domain mainly in emerging markets, its main issues at stake are: human rights, freedom of association, health and safety, governance and corruption. The company has been highlighted for violating human rights in its Latin American branches without corrective measures.
Credit analysts have exposed that this business could disappear with the digital developments. From a financial standpoint, the issuer is not transparent. We have discussed if all these risks are remunerated by its interest rate and we have agreed that there is a small prime given its exposure to emerging markets but not additional compensation for all the risks taken. The company is excluded in the end of our fixed income portfolios.