OREANDA-NEWS.  Fitch Ratings has affirmed the ratings of Controladora Mabe, S.A. de C.V. (Mabe) as follows:

--Foreign currency Issuer Default Rating (IDR) at 'BB+';
--Local currency IDR at 'BB+';
--6.5% senior unsecured notes due 2015 at 'BB+';
--7.875% senior unsecured notes due 2019 at 'BB+'.

The Rating Outlook is Stable.

Mabe's ratings reflect its low cost structure, geographic diversification and strong business position across all markets where it has a presence which in turn has allowed it to maintain revenue growth and solid pricing power. Factored in the ratings is the expectation that all agreements with General Electric Co. (GE) will be kept once the transaction between GE and AB Electrolux (Electrolux) for GE's appliance business is finalized. In addition to manufacturing agreements, Mabe's long-term relationship with GE has provided access to joint development of products and services, as well as efficiencies in the supply chain. Mabe's ratings are tempered by a highly competitive environment, exposure to commodity price and foreign exchange volatility.

KEY RATING DRIVERS

Strong Market Position
Mabe holds a strong business position in most of the Latin American markets in which it is present. The company has 13 manufacturing facilities located in Mexico, Costa Rica, Ecuador, Colombia and Argentina, which allow it to serve different markets under competitive conditions. Mabe continues to focus on offering a wide product portfolio under a multi-brand strategy that targets all socioeconomic levels, in conjunction with the long-term manufacturing and export agreements with GE.

Electrolux, a New Partner
In September 2014, Electrolux announced it had entered an agreement to acquire the appliances business of GE, including GE's 48.4% stake in Mabe. Ratings have been supported by Mabe's long-term relationship with GE and the agreements both companies have established. Mabe has stated that all agreements will be kept once the transaction between GE and Electrolux is finalized and the company does not envision strategic changes in the near term. In November 2014, Mabe received consent from note holders to modify the definition of change of control applicable to the 2019 notes to add AB Electrolux as permitted shareholders and party to the joint venture agreement.

Stable Results Amid Volatility
Fitch believes risks in Mabe's operating environment will balance out during 2015. Positive housing dynamics in the U.S., pricing initiatives, and a more favorable cost environment resulting from lower metals and plastics prices will offset low demand for appliances and weakening foreign currencies in Latin America. Fitch is projecting EBITDA of USD275 million in 2014 and USD285 million in 2015, a modest improvement from USD278 million in 2013, but still below the USD300 million registered in 2012

Moderate Improvement in Credit Metrics
Fitch is projecting gross leverage at 3.0x in 2014 and 2.8x in 2015. In its projection, Fitch considers Mabe's improved cash generating ability resulting from the absence of restructuring charges related to the closing of the company's plant in Montreal, Canada. Further deleveraging than that expected by Fitch together with a firm management commitment to maintain total debt/EBITDA at or below 2.5x in the mid- to long-term, in conjunction with robust cash flow generation, and strong liquidity would be viewed positively for the ratings.

Adequate Liquidity
The company's total debt was USD830 million at Sept. 30, 2014, with short-term debt of USD10 million. Upcoming debt maturities are USD90 million in 2015 (including USD69 million of Mabe's notes due in the fourth quarter 2015) and USD83 million in 2016 and 2017. Fitch expects Mabe to partially refinance upcoming debt maturities. Historically, the company has maintained good access to bank loans and debt capital markets.

RATINGS SENSITIVITIES

Future developments that may, individually or collectively, lead to a negative rating action include:

--Large debt-financed acquisitions, deterioration in profitability and cash flow generation from lower demand, competitive and/or input cost pressures, resulting in the expectation of gross leverage levels consistently above 3.5x.

Future developments that may, individually or collectively, lead to a positive rating action include:

--A firm management commitment to maintain total debt-to-EBITDA at or below 2.5x in the mid- to long-term, in conjunction with robust cash flow generation, stable profitability and strong liquidity.