Sao Paulo, March 17, 2017 -- Moody's America Latina ("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 on March 15, 2017.
ISSUERS AND RATINGS AFFIRMED -- OUTLOOK CHANGED TO STABLE
Ambev S.A.: the ratings of senior debentures issued
by Ambev S.A were affirmed at Baa3 in the global scale and Aaa.br
in the national scale. At the same time, Moody's Investors
Service affirmed Ambev's issuer ratings at Baa3 (global scale foreign
currency and local currency). The outlook was changed to stable
from negative.
Fibria Celulose S.A.: the CFR was affirmed at Ba1
in the global scale and Aaa.br in the national scale. At
the same time, Moody's Investors Service affirmed the Ba1 rating
of the notes issued by Fibria Overseas Finance Ltd and guaranteed by Fibria
Celulose S.A. The outlook was changed to stable from negative.
Fleury S.A.: the CFR and senior unsecured debentures
ratings were affirmed at Ba2 for the global scale and Aa2.br in
the national scale. The outlook was changed to stable from negative.
Localiza Rent a Car S.A.: the CFR and senior unsecured
debt ratings were affirmed at Ba2 in the global scale and Aa1.br
in the national scale. The outlook was changed to stable from negative.
Raizen Energia S.A and Raizen Combustiveis S.A.:
the CFR and the senior unsecured debt issued by Raizen Energia S.A.
(guaranteed by Raizen Combustiveis S.A.) ratings were affirmed
at Ba1 in the global scale and Aaa.br in the national scale.
The outlook was changed to stable from negative.
Suzano Papel e Celulose S.A.: the CFR and senior unsecured
notes rating was affirmed at Ba1 in the global scale and Aaa.br
in the national scale. At the same time, Moody's Investors
Service affirmed the Ba1 rating of the backed foreign currency senior
unsecured notes issued by Suzano Trading Ltd, a wholly-owned
subsidiary of Suzano Papel e Celulose S.A.. The outlook
was changed to stable from negative.
Telefonica Brasil S.A.: the CFR and senior unsecured
debentures ratings were affirmed at Ba1 in the global scale and Aaa.br
in the national scale. The outlook was changed to stable from negative.
Ultrapar Participações S.A.: the CFR
was affirmed at Aaa.br in the national scale and at the same time,
Moody's Investors Service affirmed the Ba1 Corporate Family Rating assigned
on its global scale to Ultrapar and also affirmed the Ba1 rating assigned
to the backed foreign currency senior unsecured notes issued by Ultrapar
International S.A, irrevocably and unconditionally guaranteed
by Ultrapar and by Ipiranga Produtos de Petróleo S.A.
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 at Ba2 and
shelf ratings at (P)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 Fibria Celulose S.A.
and Suzano Papel e Celulose S.A. was Global Paper and Forest
Products Industry published in October 2013. The principal methodology
used in rating Fleury SA was Business and Consumer Service Industry published
in October 2016. The principal methodology used in rating Localiza
Rent a Car S.A. was Equipment and Transportation Rental
Industry published in December 2014. The principal methodology
used in rating Raizen Energia S.A. and Raizen Combustiveis
S.A. was Global Protein and Agriculture Industry published
in May 2013. The principal methodology used in rating Telefonica
Brasil S.A. was Telecommunications Service Providers published
in January 2017. The principal methodology used in rating Ultrapar
Participacoes S.A. and Raizen Combustiveis S.A was
Retail Industry published in October 2015. Please see the Rating
Methodologies page on www.moodys.com.br for a copy
of these methodologies.
Moody's National Scale Credit Ratings (NSRs) are intended as relative
measures of creditworthiness among debt issues and issuers within a country,
enabling market participants to better differentiate relative risks.
NSRs differ from Moody's global scale credit ratings in that they are
not globally comparable with the full universe of Moody's rated entities,
but only with NSRs for other rated debt issues and issuers within the
same country. NSRs are designated by a ".nn"
country modifier signifying the relevant country, as in ".za"
for South Africa. For further information on Moody's approach to
national scale credit ratings, please refer to Moody's Credit rating
Methodology published in May 2016 entitled "Mapping National Scale Ratings
from Global Scale Ratings". While NSRs have no inherent absolute
meaning in terms of default risk or expected loss, a historical
probability of default consistent with a given NSR can be inferred from
the GSR to which it maps back at that particular point in time.
For information on the historical default rates associated with different
global scale rating categories over different investment horizons,
please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1060333.
REGULATORY DISCLOSURES
Information sources used to prepare the rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, and confidential and proprietary Moody's
information.
Information types used to prepare the rating are the following:
financial data, economic and demographic data, operating data,
historical performance data, public information, and regulatory
fillings.
Sources of Public Information: Moody's considers public information
from many third party sources as part of the rating process. These
sources may include, but are not limited to, the list available
in the link http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_193459.
Moody's considers the quality of information available on the rated entity,
obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not an auditor
and cannot in every instance independently verify or validate information
received in the rating process.
The rating has been disclosed to the rated entity or its designated agent(s)
and issued with no amendment resulting from that disclosure.
Please see the ratings disclosure page on www.moodys.com.br
for general disclosure on potential conflicts of interests.
Moody's America Latina Ltda. may have provided Other Permissible
Service(s) to the rated entity or its related third parties within the
12 months preceding the credit rating action. Please go to the
report "Ancillary or Other Permissible Services Provided to Entities Rated
by Moody's America Latina Ltda." in the link http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_194573
for detailed information.
Entities rated by Moody's America Latina Ltda. and the rated entities'
related parties may also receive products/services provided by parties
related to Moody's America Latina Ltda. engaging in credit ratings
activities within the 12 months preceding the credit rating action.
Please go to the link http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_194574
for a list of entities receiving products/services from these related
entities and the products/services received.
The date of the last Credit Rating Action for Ambev S.A.
was 25/02/2016.
The date of the last Credit Rating Action for Fibria Celulose S.A.
was 10/05/2016.
The date of the last Credit Rating Action for Fleury SA was 25/02/2016.
The date of the last Credit Rating Action for Localiza Rent a Car S.A.
was 10/05/2016.
The date of the last Credit Rating Action for Suzano Papel e Celulose
S.A. was 9/12/2016.
The date of the last Credit Rating Action for Raizen Energia S.A.was
10/05/2016.
The date of the last Credit Rating Action for Raizen Combustiveis S.A.was
10/05/2016.
The date of the last Credit Rating Action for Telefonica Brasil S.A.
was 10/05/2016.
The date of the last Credit Rating Action for Ultrapar Participacoes S.A.
was 24/02/2017.
Moody's ratings are constantly monitored, unless designated as point-in-time
ratings in the initial press release. All Moody's ratings are reviewed
at least once during every 12-month period.
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.br.
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.
Please see ratings tab on the issuer/entity page on www.moodys.com.br
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
ratings were fully digitized and accurate data may not be available.
Consequently, Moody's provides a date that it believes is the most
reliable and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com.br
for further information.
Please see Moody's Rating Symbols and Definitions on the Ratings Definitions
page on www.moodys.com.br for further information
on the meaning of each rating category and the definition of default and
recovery
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.br 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.br
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 America Latina Ltda.
Avenida Nacoes Unidas, 12.551
16th Floor, Room 1601
Sao Paulo, SP 04578-903
Brazil
JOURNALISTS: 800-891-2518
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