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| DCR Places Ratings of Grupo Minero Mexico on Rating Watch--Down |
CHICAGO, Sept. 27 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR)
has placed several ratings associated with Grupo Minero Mexico (GMM) on Rating
Watch--Down following the announcement of Grupo Mexico's offer to acquire
Asarco, the U.S. copper producer. Grupo Mexico is the parent company of Grupo
Minero Mexico, which is Mexico's largest mining company. Ratings affected are
as follows:
Debt Rated/Rated Security
Senior Implied Debt (Peso) 'BBB' (Triple-B) Rating Watch--Down
Secured Export Notes (1995 Series B1, C)
'BBB' (Triple-B) Rating Watch--Down
Secured Export Notes (1996 Series D)
'BBB' (Triple-B) Rating Watch--Down
Guaranteed Senior Notes (1998) 'BBB-' (Triple-B-Minus)
Rating Watch--Down
There is no change to the 'BB+' (Double-B-Plus) foreign currency rating of
GMM or the 'AAA' (Triple-A) rating of the Secured Export Notes (1997 Series E
Pass-Through). The 'AAA' (Triple-A) rating reflects the credit quality of
MBIA Insurance Corporation, the financial guarantor for this transaction.
Based on the current intended structure of the transaction, DCR believes a
downgrade of the ratings placed on Rating Watch--Down will occur if the
purchase is successfully completed on the current terms, but that the Senior
Implied Debt (Peso) rating of GMM will likely remain in the investment-grade
category. Net debt at GMM is not expected to increase beyond the $250 million
in cash that is planned to be upstreamed to Grupo Mexico to fund a portion of
the purchase.
DCR assumes that if the purchase is successful as currently structured,
Grupo Mexico would require only limited upstream financial support from GMM in
the event of unfavorable conditions at Asarco, including periods of low copper
prices. DCR also assumes that if Asarco would require significant ongoing
support, other options would be utilized to fund any shortfalls, leaving the
net debt position of GMM relatively unchanged.
The ratings placed on Rating Watch--Down will remain under this
designation until the acquisition is completed as currently structured, the
offer is withdrawn, or the terms of the transaction change in such a way as to
alter DCR's view of GMM's likely rating following the transaction.
SOURCE Duff & Phelps Credit Rating Co.
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CONTACT:
Ted Sherman, 312-368-5447, sherman@dcrco.com,
or Mark Oline, 312-368-2073, oline@dcrco.com, or Marco Sotomayor
J., +528-356-6880, msjuvera@intercable.net, all of Duff & Phelps
Credit Rating Co.
