Fitch rates Grupo Bimbo notes BB+

Fitch Ratings said it assigned a BB+ rating to the $500 million perpetual senior subordinated notes of Grupo Bimbo, SAB de CV (BBB/stable).

The proposed notes qualify for 50% equity credit.

Proceeds will be used mainly to refinance current debt, pay the purchase price of recent acquisitions and partially fund capital expenditures.

“The proposed securities qualify for 50% equity credit as they meet Fitch's criteria with regard to subordination, cross defaults, no material covenants, effective maturity of at least five years, ability to defer coupons for at least five years, and no look-back provisions,” the agency said in a news release.

“As a result of these features, the BB+ rating is two notches below Bimbo's issuer default rating as they reflect higher loss severity and heightened risk of non-performance relative to senior obligations.”

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