Grupo Bimbo to sell $800 million in bond offering
Jan. 19, 2012
by Eric Schroeder
MEXICO CITY — Grupo Bimbo, S.A.B. de C.V. said it has priced its offering of $800 million of 4.50% notes due 2022, at an issue price of 99.19%, to yield 4.602%. The notes will constitute senior unsecured obligations of Grupo Bimbo and unconditionally will be guaranteed by certain of Grupo Bimbo’s subsidiaries, including Bimbo, S.A. de C.V.; Barcel, S.A. de C.V.; Bimbo Bakeries USA, Inc.; Bimbo Foods, Inc.; and Earthgrains Bakery Group, Inc.
Grupo Bimbo said it plans to use the proceeds from the offering “to refinance existing indebtedness and for general corporate purposes.”
Grupo Bimbo last issued debt in June 2010, when it sold $800 million of 4.875% of senior unsecured notes due in 10 years.
Following the announcement, Fitch Ratings assigned a rating of “BBB” to Grupo Bimbo’s proposed senior notes issuance.
“Bimbo’s ratings are supported by its important size and scale within the global bakery industry, its strong brand recognition and positioning in the markets where it operates, and its extensive distribution network that provides a key competitive advantage,” Fitch said. “The ratings also incorporate the company’s geographic diversification, as well as a broad brand product portfolio that covers a wide consumer base. In addition, Fitch considers that Bimbo participates in a relatively stable industry that is less exposed to economic downturns, which has historically led to low volatility in Bimbo's revenues and margins. The ratings are tempered by higher than historical debt levels, as a result of the company's recent acquisitions.”
Fitch added the ratings consider “the expected effect on Bimbo’s financial position derived from the acquisition of Sara Lee Fresh Bakery Business in North America and Sara Lee Fresh Bakery Business in Spain and Portugal, which were closed during the fourth quarter of 2011.”