Corporate High-Grade Bond of the Year: Grupo Bimbo

Corporate High-Grade Bond of the Year: Grupo Bimbo

Investor concerns about the economic policies of President Andrés Manuel López Obrador and Mexico’s weakening public finances weighed heavily on Mexican assets last year.

However, high-quality Mexican corporate issuers proved resilient. Grupo Bimbo, the world’s largest bread maker, demonstrated that in September with a new benchmark-sized bond.

Bimbo raised $600 million from the sale of30-year notes, tightening the spread by 25bp on strong demand. Bookrunners BBVA, Citi, JPMorgan, Morgan Stanley and MUFG set the initial price talk at 240bp over US Treasury bonds, but they eventually issued the notes at 215bp. Bimbo’s bond priced with a 4% coupon to yield 4.097%, one of the lowest ever for a 30-year bond from a corporate Latin American issuer.

Proceeds of the bonds went to refinance some of the company’s $800 million in 4.875% notes maturing this year.

The terms and conditions helped put Bimbo on similar footing with some US investment grade issuers, in the eyes of some investors. While Bimbo is headquartered in Mexico, according to Fitch Ratings, it receives some two-thirds of its revenue and nearly half of its Ebitda from external markets.

Several days after Bimbo’s transaction, several other prominent Mexican companies came to the bond market, including BBVA Bancomer and Industria Peñoles.

Award accepted by: Maria Jose Porrero, Deputy Treasurer

Corporate High-Grade Bond of the Year

Date: September 2019

Size: US$ 600 million

Supporting Financial Institutions: BBVA; Citi; J.P. Morgan; Morgan Stanley; MUFG; ING 

Supporting Law Firms: Skadden; Cleary Gottlieb; Galicia Abogados; Ritch Mueller

All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email awards@latinfinance.com