Fitch Affirms Mabe's IDR at 'BBB-'; Outlook Stable

MONTERREY, Mexico--(BUSINESS WIRE)--Fitch Ratings has affirmed the ratings of Controladora Mabe, S.A. de C.V. (Mabe) as follows:

--Local currency Issuer Default Rating (IDR) 'BBB-',

--Foreign currency IDR 'BBB-',

--$200 million senior notes due 2015 'BBB-'.

The Rating Outlook is Stable.

The rating actions reflect Mabe's strong business position as Mexico's leading manufacturer and exporter of white-line home appliances, and its joint venture and relationship with General Electric (GE) for the supply of gas and electric ranges and refrigerators for the U.S. market. The ratings also reflect Mabe's geographic and product diversification, strong proprietary and licensed brands, and adequate capital structure. The industry presents challenging market conditions due to increased raw material and energy costs, high competition in all countries where Mabe has a presence, and pressures on consumer's purchasing power.

In February 2008 Mabe completed the acquisition of Atlas Electrica, S.A. (Atlas), a home appliance manufacturer in Costa Rica, for approximately US$82 million. This transaction allows Mabe to consolidate its leadership in the region as the sole manufacturer located in Central America and also serving other Andean countries. On a pro forma basis after the acquisition, the company maintains a solid financial profile. Fitch expects that the Total debt-to-EBITDA ratio will remain below 2.5 times (x) in the near future, supported by strong cash generation and a continued capex program focused on increasing production capacity and higher productivity.

Mabe's long relationship with GE since 1987 strengthens the company's business position. During 2007 Mabe exports to GE represented 30% of total consolidated revenues of US$3,678 million. Under an export agreement, Mabe produces a wide array of gas and electric ranges and refrigerators sold by GE in the U.S. Further capacity expansions at Mabe's manufacturing facilities anticipate the extension of this relationship.

Mabe continues to maintain a strong business position on the continent, supported by its leading market shares, favorable cost structure and access to GE's global sourcing network. The company benefits from its broad product and brand portfolios which allow it to serve all demographic segments and face the prevailing competitive environment.

Mabe's liquidity and debt structure is adequate. At Dec. 31, 2007 total debt was US$879 million of which 20% or US$187 was short term, and had a cash and marketable securities balance of US$190 million. During 2008 the company plans to refinance short-term debt, as well as fund the Atlas acquisition and capital expenditure (capex) projects. The company's credit protection measures should remain at current levels, in line with the rating category, and could moderately improve in the future.

Mabe is one of the leading manufacturers and distributors of white-line appliances in North, Central and South America. The company started operations in 1946 and in 1987 became a joint venture with GE, which holds a 48.4% equity interest. Mabe has operations in 11 countries in the Americas and presence in the U.S. through exports to GE, with manufacturing facilities in Mexico, Costa Rica, Colombia, Ecuador, Brazil, Argentina and Canada. During 2007 the company generated revenues and EBITDA of US$3,678 million and US$354 million, respectively.

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