Elementia Plots Local Bond Issue

Moody’s has assigned a Ba3 rating to Elementia’s proposed MXP3bn senior unsecured 2015 notes and a Ba3 corporate family rating to Elementia with a stable outlook. The company manufactures semi-finished copper, aluminum products, fiber cement and concrete products mainly in Mexico and also in Central and South America, The proceeds of the issuance are expected to refinance about half of the debt from any existing $450m 5-year term loan. The ratings rationale is that the company has a solid market position, is in several markets and has modest financial leverage. It also has solid profit margins and expected stable earnings, says Moody’s. However, it adds that the company has a limited operating scale and business diversification and is also exposed to base metal cycles.