Fibria ratings not affected by 1.25B reis public offering, says S&P; company rated BB/stable

Joyce Routson

Joyce Routson

Mar 9, 2012 – Industry Intelligence

LOS ANGELES , March 9, 2012 () – Standard & Poor’s said Thursday that its ratings on Brazilian pulp producer Fibria Celulose S.A. are not immediately affected by the company’s announcement  of a 1.25 billion reias (US$710 million) public offering to help strengthen its capital structure and reduce debt levels.

S&P Ratings Services rates the company BB/stable.

Fibria also said it had accepted a binding offer for the purchase of 235 million reias-worth of forests and land.

S&P said in a statement: “The public offering is a significant step toward improving Fibria's capital structure, in our view, but we don't include it in our analysis before the successful closing of the transaction, because of market risks. Although we have already incorporated a gradual strengthening of the company's credit metrics, the public offering will improve its net leverage compared with our base case, assuming it will hold the proceeds in cash holdings.”

The rating agency also noted that a positive rating action would depend on significant deleveraging and maintenance of sound liquidity, leading to stronger credit metrics.

The source of this article is Reuters, London, England and Standard & Poor's, New York, New York, both on March 8, 2012.


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