New York, March 17, 2017 -- Moody's Investors Service ("Moody's") has revised to stable from negative
the outlook for several companies operating in Brazil, while all
ratings were affirmed. The companies' outlook change follows the
change in Brazil's outlook to stable from negative and the affirmation
of its issuer rating, senior unsecured at Ba2 and shelf ratings
at (P) Ba2, respectively on March 15, 2017.
ISSUERS AND RATINGS AFFIRMED -- OUTLOOK CHANGED TO STABLE
Ambev S.A.: the long-term issuer rating was
affirmed at Baa3. The outlook was changed to stable from negative.
BRF S.A.: the CFR and the foreign currency senior
unsecured global bonds issued by BRF S.A. and the backed
foreign currency senior unsecured global bonds issued by BBF International,
Ltd. and Sadia Overseas Ltd. ratings were affirmed at Ba1.
The outlook was changed to stable from negative.
Cielo S.A.: the CFR and foreign currency senior unsecured
notes issued by Cielo S.A. and the backed foreign currency
senior unsecured notes issued by Cielo USA Inc. were affirmed at
Ba1. The outlook was changed to stable from negative.
Embraer S.A.: the CFR and the foreign currency senior
unsecured notes issued by Embraer S.A., and the Backed
foreign currency senior unsecured notes issued by Embraer Overseas Limited
and Embraer Netherlands Finance BV ratings were affirmed at Ba1.
The outlook was changed to stable from negative.
Fibria Overseas Finance Limited.: the Backed foreign currency
senior unsecured ratings of the notes guaranteed by Fibria Celulose S.A.
were affirmed at Ba1. The outlook was changed to stable from negative.
Suzano Trading Ltd.: The Backed foreign currency senior unsecured
rating of the notes issued by Suzano Trading Ltd, a wholly-owned
subsidiary of Suzano Papel e Celulose S.A. ('Suzano') were
affirmed at Ba1. The outlook was changed to stable from negative.
Globo Comunicação e Participações S.A.:
the CFR and foreign currency senior unsecured debt ratings were affirmed
at Ba1. The outlook was changed to stable from negative.
Ultrapar Participações S.A.: the CFR
of Ultrapar Participações S.A (Ultrapar) and the
USD 750 million backed foreign currency senior unsecured notes due 2026
issued by Ultrapar International S.A, irrevocably and unconditionally
guaranteed by Ultrapar and by Ipiranga Produtos de Petróleo S.A.
were affirmed at Ba1. The outlook was changed to stable from negative.
RATINGS RATIONALE
The rating affirmation and the change in outlook to stable for these companies
follows the change in Brazil's outlook to stable from negative and
the affirmation of its issuer rating, senior unsecured and shelf
ratings at Ba2 on March 15, 2017, driven by the following
factors:
1. Moody's expectation that the downside risks reflected in the
negative outlook are abating and macroeconomic conditions stabilizing,
with the economy showing signs of recovery, inflation falling and
the fiscal outlook clearer.
2. Indications that the functioning of Brazil's policy framework
is improving and the strength of its institutions recovering, supporting
planned implementation of structural fiscal reforms.
3. Risk of contingent liabilities from government-related
entities, captured in the negative outlook, has been significantly
reduced.
Over the past six months, downside risks to the Ba2 rating have
abated and macroeconomic conditions have stabilized in Brazil, with
an incipient recovery in economic growth expected in 2017 and faster-than-anticipated
fall in inflation. A positive reform momentum emerged last year,
indicating improved functioning of institutions that would support implementation
of fiscal reforms and passage of the social security reform this year.
Contingent liability risks related to financial support to Petrobras have
diminished, reducing downside risks, while the fiscal cost
of debt relief provided to state governments remains contained.
Overall, the government debt trajectory remains in line with our
earlier expectations for 2017-19 and consistent with the Ba2 rating.
The stable outlook for the affected companies reflects Moody's view that
the creditworthiness of these companies cannot be completely de-linked
from the credit quality of the Brazilian government, and thus their
ratings need to closely reflect the risk that they share with the sovereign.
Moody's believes that a weaker sovereign has the potential to create a
ratings drag on companies operating within its borders, and therefore
it is appropriate to limit the extent to which these issuers can be rated
higher than the sovereign, in line with Moody's Rating Implementation
Guidance "How Sovereign Credit Quality Can Affect Other Ratings" published
on 16 March 2015, and available on www.moodys.com.
The principal methodology used in rating Ambev S.A. was
Global Alcoholic Beverage Industry published in March 2017. The
principal methodology used in rating BRF S.A., BFF
International, Ltd., and Sadia Overseas Ltd.
was Global Protein and Agriculture Industry published in May 2013.
The principal methodology used in rating Cielo S.A. and
Cielo USA Inc. was Business and Consumer Service Industry published
in October 2016. The principal methodology used in rating Embraer
S.A., Embraer Netherlands Finance BV, and Embraer
Overseas Limited was Global Aerospace and Defense Industry published in
April 2014. The principal methodology used in rating Fibria Overseas
Finance Limited and Suzano Trading Ltd was Global Paper and Forest Products
Industry published in October 2013. The principal methodology used
in rating Globo Comunicacao e Participacoes S.A. was Global
Broadcast and Advertising Related Industries published in February 2017.
The principal methodology used in rating Ultrapar Participacoes S.A.
and Ultrapar International S.A. was Retail Industry published
in October 2015. Please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead analyst and the Moody's legal entity that has issued the ratings.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Marcos Schmidt
Vice President - Senior Analyst
Corporate Finance Group
Moody's America Latina Ltda.
Avenida Nacoes Unidas, 12.551
16th Floor, Room 1601
Sao Paulo, SP 04578-903
Brazil
JOURNALISTS: 800-891-2518
SUBSCRIBERS: 55-11-3043-7300
Marianna Waltz, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 800-891-2518
SUBSCRIBERS: 55-11-3043-7300
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
