Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
08 Oct 2018
New York, October 08, 2018 -- Moody's Investors Service (Moody's) assigned today a provisional
(P)Baa3 issuer rating to Controladora Mabe, S.A. de
C.V. (Mabe). The outlook is stable. This is
the first time Moody's rates Mabe.
"The (P)Baa3 rating reflects Mabe's position as a leading
manufacturer and distributor of major appliances, its geographic
diversification with an extensive distribution network throughout America,
and its broad product portfolio with luxury and mainstream brands.
Mabe´s credit profile is also supported by its long-term
agreement to produce and sell ranges, refrigerators and laundry
products to General Electric Appliances in the US and its adequate credit
metrics" said Alonso Sánchez, a Vice President at Moody's.
"On the other hand, the rating is constrained by Mabe's
exposure to commodity prices and foreign exchange rate volatility,
event risk from its strategy to grow through acquisitions, the highly
competitive environment in its territories of operation, and the
cyclicality of white line products." added Sánchez.
The provisional (P)Baa3 issuer rating is subject to the successful refinancing
over the next couple of months of Mabe´s $481 million notes
Mabe's diversification throughout America mitigates the risk of
potential downturns or negative economic or industry conditions in a particular
region or country. Mabe's largest markets are the US (Aaa
stable), Mexico (A3 stable), and Canada (Aaa stable) which
together account for 73% of consolidated sales. We estimate
that the US economy will grow 2.9% in 2018 and 2.3%
in 2019 and that Mexico's GDP will increase by 2.3%
in 2017 and 2.5% in 2018. According to Euromonitor,
in Mexico Mabe ranked #1 in major appliances with a 23% market
share and #3 in consumer appliances with a 20% market share
in 2017. In the US the Haier Group, which sells GE appliances,
holds a #2 position in major appliances with 2017 market share of
21%. Major appliances will continue to grow in 2017-2022
which will benefit the company's top line. According to Euromonitor,
during that period major appliances will grow at a 2.3%
CAGR in terms of value in the US, 3.2% CAGR in Mexico
and 2% CAGR in Canada.
In 1987, the company entered into a joint-venture with General
Electric (GE) to manufacture and sell domestically and for export GE gas
range products as well as other products. Mabe manufactures 30-inch
free standing gas ranges as well as low-end and mid-end
30-inch standing electrical ranges sold under the GE brand in the
US. In 2017, Mabe exported 3,741 thousand units to
the US and Canada, out of which 87% (3,245 thousand
units) were exported to the US. We view this long term agreement
as a credit positive because it allows the company to maintain stable
revenue stream into the US market and a source of strong currency that
partly mitigates foreign exchange risk.
Mabe has strong brand recognition and ample product portfolio.
Mabe manufactures and distributes refrigerators, ranges, dryers
and washing machines and distributes built-in ovens and hoods,
water coolers, dryers, dishwashers, microwave ovens
and related parts and components. Mabe sells its products under
luxury and mainstream brands targeting several socioeconomic levels.
In the US, the company's products are sold under various GE
brand names whilst in Canada through the GE, Hotpoint, and
Moffat brand names. In Mexico and Latin America the company sells
its high-end white line products through GE Profile, Monogram,
and ioMabe brand names, middle market white line products under
the Mabe brand name, and middle and low-end products under
local brand names such as IEM and Easy (Mexico), Durex (Ecuador),
Centrales (Colombia), Patrick (Argentina), and Cetron and
Atlas (Central America).
Mabe's pricing structure for sales to GE Appliances in the US,
at a cost-plus price plus a pre-determined margin,
allows it to maintain profitability relatively stable. Nevertheless,
the company is still vulnerable to steel price and foreign exchange rate
volatility. Steel is Mabe's most relevant raw material component
accounting for around 22% of its costs, which exposes the
company to its price levels and foreign exchange rates as steel prices
are denominated in US Dollars. Accordingly, the Mexican Peso
depreciation of around 33% from December 2014 to December 2017
has been pressuring Mabe's cost structure. We estimate Mabe's
EBITDA margin, including Moody's standard adjustments,
will improve towards 9.5%-10% in 2019-2020
from 8% over the twelve months ended June 31, 2018 as a consequence
of a normalization of its operations, absent a one-time expense
related to a product recall in 2017, combined with a more stable
foreign exchange environment. Under our base case scenario we estimate
Mabe's adj. debt/EBITDA will decline to around 2.5x
by year end 2020; down from 3.9x as of June 30, 2018
from higher EBITDA generation.
Mabe's reported cash on hand of $134 million as of June 30,
2018 provides a 1.2x coverage for its short-term debt.
While the company does not have committed credit facilities it has around
$290 million in advised credit facilities that uses to fund working
capital requirements. Historically the company has posted positive
free cash flow (defined as cash from operations minus dividends minus
capex) averaging $45 million per year in 2013-2017.
The company also generated positive free cash flow over the twelve months
ended June 30, 2018. Mabe will continue to post positive
free cash flow in 2018-2020 even considering dividend payments
of around $20 million per year over this period. Mabe has
a large debt amortization of $481 million due in 2019 related to
its senior guaranteed notes due 2019. Other long-term debt
amortization include $32 million due in 2020, $28
million due 2021, $24 million due 2022, and $175
million due 2026.
The stable outlook reflects our expectation that the company will improve
its profitability while maintaining adequate liquidity and credit metrics
for the rating category.
The ratings could be upgraded if the company improves its profitability
while maintaining strong interest coverage with adj. EBIT/Interest
expense above 5.0x and leverage (adj. debt/EBITDA) below
2.5x. To be considered for an upgrade, the company
would also need to maintain robust liquidity and cash generation while
preserving a prudent dividend policy.
The ratings could be downgraded if adj. debt/EBITDA remains above
3.0x for a prolonged period of time. A deterioration on
Mabe's profitability, liquidity or credit metrics could trigger
a downgrade. Failure to successfully address, in the next
couple of months, its upcoming debt maturity in 2019 could also
result into a downgrade.
The principal methodology used in this rating was Consumer Durables Industry
published in April 2017. Please see the Rating Methodologies page
on www.moodys.com for a copy of this methodology.
Controladora Mabe, S.A. de C.V. is a
Mexican manufacturer and distributor of refrigerators, ranges,
dryers and washing machines and distributor of built-in ovens and
hoods, water coolers, dryers, dishwashers, microwave
ovens and related parts and components. The company is currently
51.6% owned by Mexican shareholders (Berrondo and Saiz families)
and by the Haier Group (48.4%). Over the twelve months
ended June 30, 2018 the company reported revenues of $3,026
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Vice President - Senior Analyst
Corporate Finance Group
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
JOURNALISTS: 1 888 779 5833
Client Service: 1 212 553 1653
Marianna Waltz, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 800 891 2518
Client Service: 1 212 553 1653
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.