Moody's rates Penoles notes Aa1.mx

Moody's Investors Service said it assigned a Baa2 global local-currency bond rating and a Aa1.mx national scale rating to Industrias Penoles SA de CV's proposed Ps. 7 billion new certificados bursatiles in two issuances not to exceed 10 years. The notes will be guaranteed by the company's principal subsidiaries, excluding Fresnillo plc.

The outlook is stable.

Penoles' ratings reflect the solid and stable position of the company within the mining industry in Mexico, the agency said.

Ratings consider the relatively stable performance of the company over the last five years, with gross margins ranging between 23% and 30% and leverage, as measured by the adjusted debt-to-EBITDA ratio not exceeding 1.8x, despite the volatility experienced in the metals markets over this time horizon, the agency noted.

Ratings also consider the significant dividend payout level of the company, the capital investment requirements to maintain and expand production levels, and the cyclical nature of the metals and chemical industries, Moody's said.

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