Fitch's analysis incorporates the company's strong commitment to support a robust financial profile and that these investments will be completed likely toward the end of 2014 with a combination of available cash, operating cash flow and debt. Fitch estimates Mexichem's net leverage could reach 2.3x by year-end 2014 assuming no material EBITDA contribution from the announced transactions. Incorporated in the ratings is a firm plan to reduce net leverage to below management's target of 2x once the new operations have been fully consolidated for 12 months. As of
In Fitch's view, if both transactions conclude favorably, Mexichem will expand its geographic footprint, product portfolio, technology and end-market diversification, as well as strengthen its vertical integration.
Mexichem's ratings consider management's commitment to maintaining a strong financial profile, the company's recurring positive free cash flow, and its strong business profile as a leading vertically integrated chemical and petrochemical company in
Fitch currently rates Mexichem as follows:
--Foreign currency Issuer Default Rating (IDR) 'BBB';
--Local currency IDR 'BBB';
--Long-term national scale rating 'AA+(mex)';
--MXN4,500 million Local Certificados Bursatiles due 2016 'AA+(mex)';
--MXN3,000 million Local Certificados Bursatiles due 2022 'AA+(mex)'.
Additional information is available at 'www.fitchratings.com'.
Source: Fitch Ratings
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