Bimbo Sinks as Weakening Peso Spurs Concern Debt Will Increase

  • Mexico peso fell to record low amid selloff in riskier assets
  • Shares of bread maker decline the most since August 2014

Grupo Bimbo SAB, the world’s largest bread maker, dropped the most since August 2014 as a slide in the Mexican peso spurred concern the company’s dollar debt costs will increase.

Shares of the Mexico City-based company fell 3.8 percent to 49.91 pesos at 1:27 p.m. in Mexico City, compared with a 1.3 percent slide for the nation’s IPC equity gauge.

“The main reason is the high leverage of the company related to the USD dollar,” Jose Antonio Cebeira, an analyst at Corporacion Actinver SAB in Mexico City, said by e-mail.

About 85 percent of Bimbo’s debt is denominated in the U.S. currency, according to data compiled by Bloomberg. The Mexican peso fell to a record low as $800 million in dollar sales by the central bank this week was overshadowed by speculation that global growth will falter. The currency extended this year’s slide to 11 percent, almost four times as much as the next-worst performer among a basket of 16 major currencies, as investors dump the most-traded emerging-market assets.

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