Fitch affirms Arauco

Fitch Ratings said it affirmed Celulosa Arauco y Constitucion SA's (Arauco) BBB+ foreign- and local-currency issuer default ratings, as well as its AA(cl) national scale rating.

Fitch also said it affirmed the BBB+ foreign-currency issuer default rating of its Argentine operating subsidiary, Alto Parana SA, along with its senior unsecured guaranteed notes due 2017 at BBB+.

The agency also affirmed Arauco's senior unsecured debt rating at BBB+ and senior unsecured Chilean peso-denominated bond lines and the bonds issued through those programs at AA(cl).

The ratings are supported by the company's strong business position and financial profile, Fitch said.

The company is the second largest market pulp company in the world and has one of the lowest cost structures in the industry, which allows it to generate strong operating cash flows during market downturns, the agency said.

Arauco's competitive cost advantage is viewed to be sustainable due to its productive forest plantations, Fitch added.

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