In a transaction that may close as early as next week, the Mexican cigarette company, Cigarrera La Moderna SA de CV (CLM), has lit up the local market with an mxAAA rating from Standard & Poor's, the highest rating to hit the country's national scale to date.
The Ps2.1 billion (USD $216 million) deal features a passthrough-like structure in which Bancomer, the second largest Mexican bank, will sell three corporate loans from CLM to a master trust. BankBoston will act as the trustee. The trust will then issue Certificados de Participacin Ordinarios (CPOs), trust certificates to investors.
According to S&P, the transaction was able to receive a high level rating as a result of the full guarantee provided by British American Tobacco PLC (BAT), which has a global scale A rating and is CLM's parent company. Additionally, BAT is the second largest tobacco company in Mexico.