S.&P. upgrades Gruma ratings

by Eric Schroeder
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MEXICO CITY — Standard & Poor's Ratings Services has raised its corporate credit and debt ratings on Gruma to “BBB-” from “BB+.” The outlook on the corporate credit rating is stable.

The ratings agency said the upgrade in the corporate credit and debt ratings reflects Gruma’s “continued focus on improving its profitability and reducing debt, which has led to a stronger-than-expected financial performance.”

In December 2014, Gruma completed the sale of its wheat flour operations in Mexico to Grupo Trimex S.A. de C.V. for $260 million. The company used the proceeds to pay down debt, strengthening its key credit metrics and overall financial performance.

“In our view, this also reflects Gruma’s focus on its core business with more profitable and value-added products,” S.&P. said. “We expect Gruma will maintain a moderate financial policy, which won’t require external financing to fund dividend payments and/or other investments.”

The ratings agency said it now assesses Gruma’s financial risk profile as “intermediate,” and expects the company to maintain a solid financial performance in the next two years despite the somewhat capital-intensive nature of the industry, Gruma’s decision to restart paying dividends in 2014, and the expectation of some small acquisitions, and no need of meaningful external funding.
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