Moody’s Positive on Bimbo

Moody’s has improved the outlook of Mexican food company Bimbo, rated Baa2, to positive from stable. The agency cites Bimbo’s progress in deleveraging its balance sheet after acquiring US-based Weston Foods, where it also expects synergies. For the 12 months ended March 31, debt to Ebitda was 2.5x and Bimbo aims to reduce this to 2.0x, Moody’s says. However, Moody’s also notes challenging conditions in Bimbo’s key Mexican and US baked goods markets. Debt maturities in 2011 are minimal, at MXP714m, rising to MXP13.5bn in 2012, MXP5.4bn in 2013 and MXP7.7bn in 2014, says Moody’s, which expects Bimbo to refinance these on a timely basis in DCM or the bank market, as well as some free cash flow. Bimbo also maintains a $750m committed revolving credit facility which is undrawn and provides alternate liquidity, the agency adds.