Moody's rates Bimbo notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to Grupo Bimbo, SAB de CV's proposed $500 million in senior unsecured global notes due in 2020.

The outlook is positive.

Proceeds will be used to refinance a portion of its bank debt, thereby increasing its average life of debt and improving its debt maturity profile.

The notes, which should be neutral to credit metrics, will be guaranteed by Bimbo's four major operating subsidiaries, the agency said.

The assigned rating reflects the free cash flow generation of Bimbo's high margin baked-goods franchise in Mexico, the company's improved U.S. business position and geographic diversification following its Weston Foods acquisition in January 2009, as well as its prudent financial policies and the progress made in reducing acquisition-related debt over the past year, according to the agency.

Factors partly offsetting these strengths include the competitive nature and consolidation trends of the markets Bimbo operates in, the volatility of results in its South and Central American markets and the traditionally modest profitability in its western U.S. markets, Moody's said.

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