S&P gives Alpek notes BB+

S&P said it assigned its BB+ issue-level rating to Alpek SAB de CV’s proposed senior unsecured notes for up to $600 million due 2031.

“The rating on the proposed notes is at the same level as our issuer credit rating on Alpek, reflecting our view that there’s no significant subordination risk present in its capital structure because debt at the subsidiaries’ level represents about 5% of the company’s total debt; well below our 50% threshold,” S&P said in a press release.

The company plans to use the proceeds mostly for refinancing debt. The notes will benefit from upstream guarantees from some of Alpek’s main operating subsidiaries and will rank equally with Alpek’s other senior unsecured debt.

This transaction would shift the largest debt maturities mainly to 2029 and 2031.

“We consider the transaction as debt neutral given that this issuance doesn’t represent an increase in debt to Alpek’s capital structure,” S&P said.

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