S&P revises Empresas to negative

S&P said it revised the outlook on Empresas CMPC SA to negative from stable and affirmed its corporate and issue-level ratings at BBB-.

“We don't believe that the investors in the senior notes face a significant disadvantage as creditors of the financing vehicle of the group (Inversiones CMPC SA), because they are guaranteed by Empresas, thus ranking pari passu to all of the parent's current and future senior unsecured debt,” the agency said in a news release.

The outlook revision reflects S&P’s revised projections following the announcement of the stoppage of the Guaiba II pulp mill until November.

The agency said it believes the company won't be able to improve its cash flow generation and reduce leverage in 2017 after posting weaker-than-expected credit metrics in 2016.

“We expect the company to end the year with a net debt-to-EBITDA ratio close to 4.0x and FFO to debt slightly below 20%, and to only reach leverage levels consistent with the current credit rating level in 2018,” S&P added in the release.

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