Fitch Ratings Affirms Copamex at 'BB-'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed Copamex, S.A. de C.V. (Copamex) senior unsecured foreign and local currency Issuer Default Ratings (IDRs) at 'BB-' and the senior unsecured national scale rating at 'A-(mex)'. Fitch has also affirmed the rating of Copamex's peso-denominated medium-term notes or Certificados Bursatiles (CBs) at 'A(mex)' and the short-term rating at 'F2(mex)'. The Outlook is Stable. The ratings are supported by the company's market position, stable operating performance and improved debt maturity profile. Copamex continues to maintain a strong market position in its core business lines and a stable revenue base. During 2005, 53% of revenues were derived from products with leading market shares in Mexico. Over the past several years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company has maintained stable EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become levels of around US$40 million per year. The combination of a favorable outlook in Mexico on consumer demand for paper products and cost efficiencies in energy consumption should enable moderate increases in revenues and EBITDA during 2006. At March 31, 2006 total on-balance sheet debt reached MXP MXP In currencies, this is the abbreviation for the Mexican Peso. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1,422 million on a gross basis and MXP1,317 million net of restricted cash related to a 15% collateral on MXP700 millions outstanding CBs. The debt was composed of peso-denominated medium-term notes issues totaling MXP 1,267 million, MXP54 million of U.S. dollar-denominated commercial paper and MXP101 of bank debt. During 2005, the company completed a US$40 million five-year revolving assignment of receivables to an irrevocable trust Irrevocable Trust A trust that, once its setup, cannot be changed at all. Notes: This is to prevent fraudulent activities. See also: Exemption Trust, Trust, Unit Trust Irrevocable trust A trust that is unable to be amended, altered, or revoked. administered by Banco Invex as trustee and borrower. Proceeds from the transaction (funded by Rabobank) were used by Copamex for working capital purposes, liquidation of a factoring facility, cash collateral and debt repayment. Although this transaction was structured without recourse A phrase used by an endorser (a signer other than the original maker) of a negotiable instrument (for example, a check or promissory note) to mean that if payment of the instrument is refused, the endorser will not be responsible. , the asset coverage (unencumbered receivables) on unsecured creditors of Copamex has diminished. The company's leverage including off-balance sheet liabilities remains high and credit protection measures are in the weak range of the rating category. At March 31, 2006, the company had a ratio of on-balance sheet debt (net of restricted cash) to last 12 months (LTM LTM abbr. long-term memory ) EBITDA of 3.1 times (x) and a ratio of EBITDA to interest expense of 2.9x. During 2005, Copamex improved its debt maturity profile with the refinancing of debt with MXP700 million of CBs due 2008 and 2009. The company is at present seeking to extend the maturity of MXP100 million of CBs due 2006 to 2010. Management's strategy is focused on organic growth with modest capital expenditures, which should allow the company to generate modest free cash flow during 2006 and reduce debt. This should translate into moderate improvements in credit protection measures during the year and beyond. Failure to meet these financial targets could affect the ratings negatively. Copamex was founded in 1928 as an industrial paper manufacturer. During 2003 and 2004, the company divested its multi-wall bag business and its consumer division and used proceeds for debt reduction. Copamex has three main business divisions: packaging, printing and writing, and child diapers. In 2005 sales and EBITDA reached US$434 million and US$39 million respectively. Packaging accounted for 48% of revenues, printing and writing for 45%, and diapers for the remaining 7%. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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