Hylsa prepaying US$139mn of bonds

Mexican iron and steel company Hylsamex's (BMV: HYLSAMXB) subsidiary Hylsa is prepaying US$139mn of Yankee bonds this week, El Milenio newspaper reported. The bonds were due to mature in 2007 but steelmaker Hylsa is using medium-term financing obtained under more favorable conditions to prepay the debt, the paper said. The company will also pay a premium of approximately US$2mn for redeeming the bonds. Hylsamex returned to profitability in 2004 and reduced its debt almost 50% thanks to strong demand and high steel prices. The company is majority-owned by Mexican steel and industrial conglomerate Grupo Alfa, which recently postponed a decision on spinning Hylsamex off until year-end. Sales at Hylsamex rose 20% to 6.5bn pesos (US$594mn) in the first quarter of 2005, while net profit increased 45% to 1.03bn pesos.