Mexichem S.A.B. de C.V.#s Proposed Up To $1 Billion Senior Unsecured Notes Rated #BBB-#

Stocks and Financial Services Press Releases Thursday September 28, 2017 08:49
MEXICO CITY--28 Sep--S&P Global Ratings

MEXICO CITY (S&P Global Ratings) Sept. 27, 2017--S&P Global Ratings today assigned its 'BBB-' issue-level rating on Mexican chemicals and petrochemicals producer Mexichem S.A.B. de C.V.'s (Mexichem; GS: BBB-/Stable/--; NS: mxAA/Stable/mxA-1+) up to $1 billion senior unsecured notes bearing a fixed interest rate in two tranches due in 2027 and 2047.

Mexichem plans to use the proceeds to finance its 80% stake acquisition in Netafim Ltd. The transaction is likely to close at the end of the year, subject to regulatory approvals.

The rating on the notes are at the same level as our corporate credit rating on Mexichem, reflecting the fact that the company's priority liabilities represent less than 20% of its total assets. Additionally, Mexichem's debt instruments are fully and unconditionally guaranteed on a senior unsecured basis by its most important subsidiaries, which account for more than 50% of its consolidated assets.

The ratings on Mexichem reflects our expectation that despite taking on additional debt to fund Netafim's acquisition, Mexichem's leverage ratios will remain below 3.0x at the end of 2018. In our view, Mexichem's target leverage will continue to support our investment-grade ratings on the company.


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