New York, April 10, 2018 -- Moody's Investors Service ("Moody's") has taken rating actions on several
companies operating in Brazil. The rating actions follow the change
in the outlook on the Government of Brazil's rating to stable from
negative, and the affirmation of Brazil's issuer, senior
unsecured ratings at Ba2 and its senior unsecured shelf ratings at (P)Ba2.
Moody's decision to affirm the Ba2 ratings reflects credit strengths that
offset weak fiscal metrics compared to similarly rated peers. Moderately
strong economic and institutional factors are in line with regional and
Barated peers, and external vulnerability is very low. Fiscal
consolidation is expected to continue. For further information,
refer to the rating action press release: https://www.moodys.com/research/--PR_380048.
Moody's affirmed the following global scale ratings with a stable
outlook:
Ambev S.A.: the long-term issuer rating was
affirmed at Baa3. The outlook remains stable. The company
presents a limited reliance on the local banking system for funding,
a relevant portion of assets and cash generation outside Brazil,
and relevance to controlling shareholder Anheuser-Busch InBev SA/NV
(ABI) (A3 stable), which help to outweigh Ambev's links with the
Brazilian economy. Additionally it presents a dominant market position
in Brazil, strong execution capabilities and strict cost control,
all of which allowed the company to withstand the recent downturn in the
local economy, for the past two years, and still maintain
exceptionally strong credit metrics, solid profitability levels,
ample liquidity, and modest leverage.
Vale S.A.: Vale S.A.'s foreign
currency senior unsecured ratings, the ratings on the debt issues
of Vale Overseas Limited (fully and unconditionally guaranteed by Vale
S.A.) were affirmed at Ba1 and the senior unsecured ratings
of Vale Canada Ltd were affirmed at Ba3. The outlook remains stable.
Moody's affirmed the following global scale ratings and changed
the outlook to stable from negative:
Braskem S.A.: the CFR of Braskem S.A.
and the foreign and local currency debt issuances of Braskem Finance Ltd
and Braskem America Finance Company, fully guaranteed by Braskem
S.A., 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.
Cosan S.A. Industria e Comercio: the ratings of the
senior unsecured foreign currency notes issued by Cosan Overseas Limited
and foreign currency notes issued by Cosan Luxembourg SA and guaranteed
by Cosan S.A. Industria e Comercio were affirmed at Ba3.
The outlook was changed to stable from negative. Moody's
views Cosan Overseas Limited and Cosan Luxembourg SA senior unsecured
ratings guaranteed by Cosan as structurally subordinated to the debt at
its operating subsidiaries Raizen (Raizen Combustives S.A.
and Raizen Energia S.A.) and Cia de Gas de Sao Paulo -
COMGAS (Ba2 stable).
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. 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
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. were affirmed
at Ba1. The outlook was changed to stable from negative.
Votorantim S.A.: the backed foreign currency senior
unsecured rating of the notes issued by Companhia Brasileira de Aluminio,
a wholly-owned subsidiary of Votorantim S.A. ('Votorantim')
were affirmed at Ba2. The outlook was changed to stable from negative.
Votorantim Cimentos S.A.: the CFR and the senior unsecured
and global notes issued by Votorantim Cimentos and the foreign currency
debt issuances of St Mary Cement Inc, all debts guaranteed,
were affirmed at Ba2. The outlook was changed to stable from negative.
Moody's affirmed the following global scale ratings with a negative
outlook:
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 BFF International,
Ltd. were affirmed at Ba2. The outlook remains negative.
Currently the ratings of BRF reflect the company's weak credit metrics
and our expectation that leverage will remain high in the next few quarters,
rather than its possible correlations with Brazil's sovereign ratings.
RATINGS RATIONALE
The rating actions for these non-financial corporates reflect 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 Methodology "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., Cosan Luxembourg SA and Cosan
Overseas Limited was Global Protein and Agriculture Industry published
in June 2017. The principal methodology used in rating Braskem
S.A., Braskem America Finance Company and Braskem
Finance Ltd was Chemical Industry published in January 2018. 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 Aerospace and Defense Industry published in March 2018.
The principal methodology used in rating Globo Comunicacao e Participacoes
S.A. was Media Industry published in June 2017. The
principal methodology used in rating Votorantim Cimentos S.A.
and St. Marys Cement Inc was Building Materials Industry published
in January 2017. The principal methodology used in rating Vale
Canada Ltd.,Vale Overseas Limited, Vale S.A.
and Companhia Brasileira de Aluminio was Mining Industry published in
April 2018. The principal methodology used in rating Suzano Trading
Ltd and Fibria Overseas Finance Limited was Paper and Forest Products
Industry published in March 2018. 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.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
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 rating analyst and the Moody's legal entity that has issued
the ratings.
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.
Barbara Mattos, CFA
Senior Vice President
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
Client Service: 1 212 553 1653
Marianna Waltz, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 800 891 2518
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
