Fitch: Elementia notes BB+

Fitch Ratings said it assigned an expected rating of BB+ to Elementia, SA de CV’s proposed $400 million notes with a maturity of up to 10 years.

Elementia also has a long-term issuer default rating of BB+, long-term local-currency issuer default rating of BB+, long-term national scale rating of A+(mex) and an A+(mex) rating on its Ps. 3 billion local certificados bursatiles due in 2015.

The proceeds will be used for general corporate purposes, including the repayment of existing indebtedness and the purchase of joint-venture minority interests, Fitch said.

The new notes will rank pari passu with Elementia’s existing unsecured debt, the agency said.

The guarantors of the notes will be Nacional de Cobre, SA de CV, Mexalit Industrial, SA de CV, Frigocel, SA de CV, Plycem Costa Rica, SA, Plycem Salvador, SA de CV, Eternit Colombiana SA, Eternit Pacifico SA, Eternit Atlantico SA, Eternit Ecuatoriana SA, Industrias Duralit SA and Fibraforte SA.

The outlook is stable.

The ratings reflect the company’s strong business profile, characterized by geographic and product line diversification and leading market shares in the regions where it has presence, Fitch said.

The ratings are supported by highly recognized brands and a well-developed distribution network, stable operating results and its shareholders’ strength, the agency added.

Factors that limit Elementia’s ratings are the company’s history of high leverage, industry cyclicality and input cost volatility, Fitch said.

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