MONTERREY, MEXICO — Grupo Bimbo S.A.B. de C.V. has been given a foreign-currency issuer default ratting of BBB by Fitch Ratings. Fitch also gave Bimbo a BBB local currency issuer default rating of BBB.
Fitch’s national scale long-term rating for Bimbo is AA+.
“The ratings are based on the company’s leadership position in the global bakery business, strong brand recognition and positioning in the markets where it operates and its distribution network, which allows it to reach over 1 million points of sale through more than 39,000 sales routes,” Fitch said. “The ratings also incorporate its improved business profile and geographic diversification, as revenues and EBITDA from the U.S. market now represent 42% and 36%, respectively.”
Fitch said Bimbo performed well during the economic recession, even though sales growth was modest.
“The integration process of the Weston Foods operations has been smooth and efficient, and expected savings from synergies are now higher than initially projected,” the agency added.
Bimbo has been able to pre-pay $535 million of debt since completing the Weston acquisition.
“Leverage at the end of the first quarter of 2010, as measured by total debt to last twelve-month EBITDA was 2.1x, compared to pro-forma leverage of close to 3.0x at the time of the transaction,” Fitch said. “Interest coverage ratio for the same period was 5.7x, consistent with the category. Bimbo's credit protection measures should continue to strengthen in the short-to-medium term given management’s intentions to continue to use excess cash flows toward debt reduction.”