Fitch Ratings has assigned an expected rating of 'BB+(EXP)' to Elementia, SA de CV’s proposed US$400m notes with a maturity of up to 10 years. Proceeds from the notes issuance will be used for general corporate purposes, including the repayment of existing indebtedness and the purchase of joint venture minority interests. The new notes will rank pari passu with Elementias's existing unsecured debt.
The Rating Outlook for Elementia is Stable, reflecting its “strong business profile characterized by geographic and product line diversification, leading market shares in the regions where it has presence, supported by highly recognizsed brands and a well-developed distribution network, stable operating results and its shareholders' strength,” Fitch said in a statement. Factors that limit Elementia's ratings are the company's history of high leverage, industry cyclicality and input cost volatility, the rating’s agency added.
It further highlighted that the company's strategy will continue to focus on growing its current operations and through acquisitions. In September 2014, Elementia entered into an agreement to acquire the remaining 47 per cent stake in its joint venture with Lafarge in Mexico that it did not already own.
