Gruma Gets Upgrade

S&P has raised Gruma’s ratings to BB minus from B+, it says. The agency notes the “substantial reduction” in debt, using proceeds from the sale of the Mexican tortilla maker’s MXP9bn stake in Banorte. Total debt to Ebitda dropped to 2.4x, and the agency expects it to stay below 3x. S&P notes vulnerability to fluctuations in commodity prices and the threat of nationalization of its Venezuela business, and calls its liquidity profile “less than adequate,” estimating 2011 free cash flow of $40m, compared to $156m in short-term debt. The outlook is positive.