Fitch rates Mexichem notes BBB-

Fitch Ratings said it assigned a BBB- rating to Mexichem, SAB de CV's proposed $700 million of senior notes due 2022 and $300 million of senior notes due 2042. The company has BBB- foreign- and local-currency issuer default ratings and an AA(mex) long-term national scale rating, and the agency rates its $350 million senior notes due 2019 at BBB- and its certificados bursatiles issuances at AA(mex). The outlook is stable.

Proceeds from the proposed note issuances will be used primarily to refinance existing debt.

The agency said Mexichem's ratings are supported by the company's business profile as a leading vertically integrated chemical and petrochemical company in Mexico, competitive cost structure and solid financial profile. Fitch expects that the company's leverage will remain at or below management's target of a net debt-to-EBITDA ratio below 2 times.

The ratings also consider Mexichem's aggressive growth strategy through acquisitions and greenfield projects, strong competition in all markets where it operates and the cyclical nature of the chemical and construction industries, Fitch said.

For the last 12 months ended June 30, Mexichem's total debt-to-EBITDA ratio was 2.8 times.

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