Moody's changes ENCE view to negative

Moody's Investors Service said it changed the outlook to negative from stable and affirmed ENCE Energia y Celulosa, SA’s Ba3 corporate family rating and Ba3-PD probability of default rating.

"The change in outlook reflects the heightened risk from the potential annulment of the Pontevedra concession after the negative resolution of the Spanish national court. This illustrates an increasing event risk for ENCE in case the supreme court rejects its appeal or rules negatively and would force ENCE to ultimately stop production at its Pontevedra pulp mill much earlier than we had factored into the rating. This increasing event risk is outweighing strengthening operating performance following the surge in pulp prices over the past three quarters," said Oliver Giani, Moody's lead analyst for ENCE, in a press release.

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