LatinFinance - July/August 2014 - 26

firm then accessed the dollar bond market
in November last year with $2 billion in
five-, 10- and 20-year tranches, reopening
its Eurobond program in January to raise
another $500 million.
Fernandez says the bond issuance,
particularly the 10- and 30-year tranches
allowed the firm to bring its average debt
maturity from four to eight years. "This
has created a very comfortable maturity
profile," he says. "We have no important
maturities until 2018. LF

CORPORATE WITH THE BEST
EX-REGIONAL STRATEGY

Grupo Bimbo

As Latin American firms become bigger,
and as they are able to access capital for
ever larger transactions, their sway outside
the region is growing. Mexican baker
Grupo Bimbo - the world's biggest bread
producer - has been a pioneer in terms of
its diversification north of the Rio Bravo.
Thanks to various acquisitions, the US
is now Bimbo's biggest market in terms of
revenues.
Speaking in late May, chief financial
officer Guillermo Quiroz told LatinFinance
the size of its developed market operations
would help the firm pay lower spreads on
a planned Eurobond compared to its last
international debt market outing, in 2012,
when the US was not such a big proportion
of the business.
"According to the talks we've had with
bankers, we're no longer considered an
emerging market company," says Quiroz.
Grupo Bimbo's character as more of a
developed market than emerging market
firm was reinforced this year with a $1.7
billion acquisition of Canada Bread,
closed in May. It also came as the firm's
results were showing the benefits of the
firm having reached the final stages in
integrating its US acquisitions.
The Canada Bread acquisition gives
Bimbo Canada's number two market share
in bread, and the number one position in
buns and rolls, tortillas and sweet bread. It
gives Bimbo the UK's biggest bagel brand.

26 LATINFINANCE.COM - July/August 2014

Source: Grupo Bimbo

Grupo Bimbo has set a
precedent for other Latin
American firms looking to
expand outside the region

$890 million ten-year
notes to yield 3.925%,
or 135 basis points
over US Treasuries:
compared to the 270
basis points over
US Treasuries paid
in 2012. This time
around, a $500 million
30-year was priced
to yield 4.9%, 160
basis points over US
Treasuries.
Despite increased
debt in the short
term as a result of the
deal, Bimbo looks
set to benefit from
improved business
diversification,
which has proved
particularly important
at a time when the
Mexican business
is suffering from a
lackluster economy
and new taxes on highcalorie foods.
With the Canada Bread deal closed,
ratings agency Fitch says it expects Bimbo's
free cash flow to increase in 2014 and its
debt to decrease to around 2.5 times Ebitda
in the next 18 to 24 months. Fitch also said
the deal improves the group's risk profile,
with strong brands, and access to larger
retailers.
According to Quiroz, 20 years ago,
expanding in the US was seen as more of
a pre-emptive strike to prevent US firms
eating into its market share in Mexico. "The
initial rationale was to move the commercial
boundary up north," he says.
"We acquired some small companies in
California and Texas. Then in 1998 we did
our first sizeable acquisition. From there
everything started to happen naturally."
This 1998 acquisition saw Bimbo buy
the biggest family owned bakery in the US,
Texas-based Mrs Baird's Bakeries. In 2002
it bought the western US operations of
Western Foods for $610 million, to which it
added the eastern US portions of Western
Foods in 2008, in a $2.4 billion deal.
The last big acquisition in the US closed
in 2011: the $709 million buyout of Sara Lee,
which added operations in the Mid-West.
"It completed our geographic presence in
the US," says Quiroz. Canada was the logical
next step, and when the right target arose,
Bimbo grabbed it.

ALL IN ORDER: Grupo Bimbo added an
important element to its North American
baking franchise with the acquisition of
Canada Bread

Bimbo funded the deal via a $2 billion
revolving line of credit, due 2019. It gained
commitments from Bank of America Merrill
Lynch, BBVA, Bank of Tokyo-Mitsubishi
UFJ, Citi, HSBC, ING, JPMorgan, Mizuho
and Santander.
The firm drew $1.5 billion of the revolver,
and in late May Quiroz said "an important
part" of that amount would be refinanced
in the dollar bond market. And so it was:
in late June, the firm priced $1.3 billion in
ten and 30-year notes, attracting some $10
billion in orders.
Bookrunners Bank of Tokyo-Mitsubishi
UFJ, Citi, HSBC and JPMorgan priced the
GUILLERMO QUIROZ , GRUPO BIMBO

"OPPORTUNITIES
ARISE. IT IS DIFFICULT
TO MAKE DECISIONS
YEARS IN ADVANCE
THAT YOU WANT TO BE
'X' OR 'Y'"


http://www.LATINFINANCE.COM

LatinFinance - July/August 2014

Table of Contents for the Digital Edition of LatinFinance - July/August 2014

Table of Contents
LatinFinance - July/August 2014 - Cover1
LatinFinance - July/August 2014 - Cover2
LatinFinance - July/August 2014 - Table of Contents
LatinFinance - July/August 2014 - 2
LatinFinance - July/August 2014 - 3
LatinFinance - July/August 2014 - 4
LatinFinance - July/August 2014 - 5
LatinFinance - July/August 2014 - 6
LatinFinance - July/August 2014 - 7
LatinFinance - July/August 2014 - 8
LatinFinance - July/August 2014 - 9
LatinFinance - July/August 2014 - 10
LatinFinance - July/August 2014 - 11
LatinFinance - July/August 2014 - 12
LatinFinance - July/August 2014 - 13
LatinFinance - July/August 2014 - 14
LatinFinance - July/August 2014 - 15
LatinFinance - July/August 2014 - 16
LatinFinance - July/August 2014 - 17
LatinFinance - July/August 2014 - 18
LatinFinance - July/August 2014 - 19
LatinFinance - July/August 2014 - 20
LatinFinance - July/August 2014 - 21
LatinFinance - July/August 2014 - 22
LatinFinance - July/August 2014 - 23
LatinFinance - July/August 2014 - 24
LatinFinance - July/August 2014 - 25
LatinFinance - July/August 2014 - 26
LatinFinance - July/August 2014 - 27
LatinFinance - July/August 2014 - 28
LatinFinance - July/August 2014 - 29
LatinFinance - July/August 2014 - 30
LatinFinance - July/August 2014 - 31
LatinFinance - July/August 2014 - 32
LatinFinance - July/August 2014 - 33
LatinFinance - July/August 2014 - 34
LatinFinance - July/August 2014 - 35
LatinFinance - July/August 2014 - 36
LatinFinance - July/August 2014 - 37
LatinFinance - July/August 2014 - 38
LatinFinance - July/August 2014 - 39
LatinFinance - July/August 2014 - 40
LatinFinance - July/August 2014 - 41
LatinFinance - July/August 2014 - 42
LatinFinance - July/August 2014 - 43
LatinFinance - July/August 2014 - 44
LatinFinance - July/August 2014 - 45
LatinFinance - July/August 2014 - 46
LatinFinance - July/August 2014 - 47
LatinFinance - July/August 2014 - 48
LatinFinance - July/August 2014 - 49
LatinFinance - July/August 2014 - 50
LatinFinance - July/August 2014 - 51
LatinFinance - July/August 2014 - 52
LatinFinance - July/August 2014 - 53
LatinFinance - July/August 2014 - 54
LatinFinance - July/August 2014 - 55
LatinFinance - July/August 2014 - 56
LatinFinance - July/August 2014 - 57
LatinFinance - July/August 2014 - 58
LatinFinance - July/August 2014 - 59
LatinFinance - July/August 2014 - 60
LatinFinance - July/August 2014 - 61
LatinFinance - July/August 2014 - 62
LatinFinance - July/August 2014 - 63
LatinFinance - July/August 2014 - 64
LatinFinance - July/August 2014 - Cover3
LatinFinance - July/August 2014 - Cover4
https://www.nxtbook.com/nxtbooks/latinfinance/0319QMR
https://www.nxtbook.com/nxtbooks/latinfinance/1218JYM
https://www.nxtbook.com/nxtbooks/latinfinance/paraguay_2018
https://www.nxtbook.com/nxtbooks/latinfinance/8320YTM
https://www.nxtbook.com/nxtbooks/latinfinance/8465TBM
https://www.nxtbook.com/nxtbooks/latinfinance/1476YBW
https://www.nxtbook.com/nxtbooks/latinfinance/7835THM
https://www.nxtbook.com/nxtbooks/latinfinance/8655TGL
https://www.nxtbook.com/nxtbooks/latinfinance/0614IJP
https://www.nxtbook.com/nxtbooks/latinfinance/ecuador_20170910
https://www.nxtbook.com/nxtbooks/latinfinance/2713KNP
https://www.nxtbook.com/nxtbooks/latinfinance/4982CFT
https://www.nxtbook.com/nxtbooks/latinfinance/7803HWE
https://www.nxtbook.com/nxtbooks/latinfinance/3829THA
https://www.nxtbook.com/nxtbooks/latinfinance/7891MDD
https://www.nxtbook.com/nxtbooks/latinfinance/7714JCR
https://www.nxtbook.com/nxtbooks/latinfinance/5619CMK
https://www.nxtbook.com/nxtbooks/latinfinance/6939ASL
https://www.nxtbook.com/nxtbooks/latinfinance/1364ASF
https://www.nxtbook.com/nxtbooks/latinfinance/0453DAS
https://www.nxtbook.com/nxtbooks/latinfinance/0453DAS_supp
https://www.nxtbook.com/nxtbooks/latinfinance/1304APV
https://www.nxtbook.com/nxtbooks/latinfinance/7234GSD
https://www.nxtbook.com/nxtbooks/latinfinance/1643XGS
https://www.nxtbook.com/nxtbooks/latinfinance/9511JKM_supp
https://www.nxtbook.com/nxtbooks/latinfinance/9511JKM
https://www.nxtbook.com/nxtbooks/latinfinance/8745TNV
https://www.nxtbook.com/nxtbooks/latinfinance/3629PBC
https://www.nxtbook.com/nxtbooks/latinfinance/7466TBC_HSBC
https://www.nxtbook.com/nxtbooks/latinfinance/7466TBC_supp
https://www.nxtbook.com/nxtbooks/latinfinance/7466TBC
https://www.nxtbook.com/nxtbooks/latinfinance/9463RVB
https://www.nxtbook.com/nxtbooks/latinfinance/7345GPY
https://www.nxtbook.com/nxtbooks/latinfinance/6398TVB
https://www.nxtbook.com/nxtbooks/latinfinance/4899EXM_supp
https://www.nxtbook.com/nxtbooks/latinfinance/4899EXM
https://www.nxtbook.com/nxtbooks/latinfinance/3885CWS
https://www.nxtbook.com/nxtbooks/latinfinance/45923GBC
https://www.nxtbook.com/nxtbooks/latinfinance/67449NBD
https://www.nxtbook.com/nxtbooks/latinfinance/46733NLP
https://www.nxtbook.com/nxtbooks/latinfinance/78456HCL
https://www.nxtbook.com/nxtbooks/latinfinance/89456RBM
https://www.nxtbook.com/nxtbooks/latinfinance/22278HBL
https://www.nxtbook.com/nxtbooks/latinfinance/2895YBM
https://www.nxtbook.com/nxtbooks/latinfinance/9033TBM
https://www.nxtbook.com/nxtbooks/latinfinance/8934TNP
https://www.nxtbook.com/nxtbooks/latinfinance/costarica20130304
https://www.nxtbook.com/nxtbooks/latinfinance/4672PNB
https://www.nxtbook.com/nxtbooks/latinfinance/9377BKL
https://www.nxtbook.com/nxtbooks/latinfinance/drmtest
https://www.nxtbook.com/nxtbooks/latinfinance/drmtest2
https://www.nxtbook.com/nxtbooks/latinfinance/5532LMC
https://www.nxtbook.com/nxtbooks/latinfinance/9044TBM
https://www.nxtbook.com/nxtbooks/latinfinance/4877RBC
https://www.nxtbook.com/nxtbooks/latinfinance/3008JHV
https://www.nxtbook.com/nxtbooks/latinfinance/3728YBC
https://www.nxtbook.com/nxtbooks/latinfinance/9337KLM
https://www.nxtbook.com/nxtbooks/latinfinance/5674GNJ
https://www.nxtbook.com/nxtbooks/latinfinance/8330KMC
https://www.nxtbook.com/nxtbooks/latinfinance/7663HCM
https://www.nxtbook.com/nxtbooks/latinfinance/2319ZMB
https://www.nxtbook.com/nxtbooks/latinfinance/7110MKL
https://www.nxtbook.com/nxtbooks/latinfinance/8599FHG
https://www.nxtbook.com/nxtbooks/latinfinance/4517HJK
https://www.nxtbook.com/nxtbooks/latinfinance/7813GHB
https://www.nxtbook.com/nxtbooks/latinfinance/1564FBM
https://www.nxtbook.com/nxtbooks/latinfinance/8884HGV
https://www.nxtbook.com/nxtbooks/latinfinance/7863SVB
https://www.nxtbook.com/nxtbooks/latinfinance/5233SFB
https://www.nxtbook.com/nxtbooks/latinfinance/5899SML
https://www.nxtbook.com/nxtbooks/latinfinance/4311PMN
https://www.nxtbook.com/nxtbooks/latinfinance/1366FBB
https://www.nxtbook.com/nxtbooks/latinfinance/9355AXC
https://www.nxtbook.com/nxtbooks/latinfinance/8559EBN
https://www.nxtbook.com/nxtbooks/latinfinance/8244QXC
https://www.nxtbook.com/nxtbooks/latinfinance/1779BBN
https://www.nxtbook.com/nxtbooks/latinfinance/7144XVB
https://www.nxtbook.com/nxtbooks/latinfinance/8971QGH
https://www.nxtbook.com/nxtbooks/latinfinance/200805
https://www.nxtbook.com/nxtbooks/latinfinance/200804
https://www.nxtbook.com/nxtbooks/latinfinance/200803
https://www.nxtbookmedia.com