Moody's upgrades Aracruz

Moody's Investors Service said it upgraded the corporate family ratings of Aracruz Celulose SA to Ba1 from Ba2 on the global scale and to Aa2.br from A1.br on the Brazilian national scale.

The outlook is negative. The action concludes the review that began on Jan. 28.

The upgrade follows the conclusion of the acquisition by Votorantim Celulose e Papel SA (Ba1/negative) of the interests of Arapar SA and Arainvest SA in Aracruz for R$5.42 billion in case, making Votorantim the controlling shareholder of Aracruz, according to the agency.

The company has a total adjusted debt-to-EBITDA ratio that could peak at around 8.7x at year-end 2009 if weak market conditions persist through the rest of the year, Moody's noted.

Aracruz's rating is supported its position as a global supplier of bleached eucalyptus kraft pulp, its competitive production costs and efficient logistics, the agency said.

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