Bimbo To Travel into IG Territory

Mexican bake good company Bimbo will hit the road next week, going deep into investment-grade territory as it looks to tell its story to investors off the usual roadshow circuit. Now the largest bakery company in the world, the investment grade credit is coming off a recent acquisition spree that it hopes will stand it in good stead among investors going forward. With just one international bond outstanding, the company still trades wide to its US peers as well as other high-grade Mexican names. For instance, its outstanding 4.875% 2020s are trading at around 4% or 208bp over US Treasuries, versus about 3.40% for America Movil’s 2020 and 130bp for some of US comps like Kraft and Heinz, says one banker. Most recently the company agreed to buy Sara Lee’s fresh bakery business in Spain and Portugal, financing the transaction through cash on hand and existing credit lines. Bimbo, rated Baa2/BBB/BBB, has mandated BBVA, Citi and Santander, to organize meetings with talk that a 144A/RegS transaction may follow should market conditions permit. The borrower is splitting into two teams and will be in San Francisco, Chicago and Milwaukee on Tuesday January 10, in Boston, Des Moines and Baltimore on January 11, in Philadelphia on January 12, in New York between January 12-13, and in London on January 16. Bimbo made its debut in the summer of 2010, when it issued a $800m 2020 at 99.726 with a 4.875% coupon to yield 4.910%, or UST plus 180bp, the tight end of 185bp area guidance. Bank of America Merrill Lynch, Barclays and HSBC managed the sale on that occasion.