Moody's gives Natura notes Ba2

Moody's Investors Service said it assigned a Ba2 issuer rating to Natura Cosmeticos SA and a Ba2 rating to its proposed senior unsecured notes. Simultaneously, Moody's assigned a Ba3 corporate family rating to Natura&Co Holding SA, which will guarantee the notes.

“Natura's Ba3 rating primarily reflects the company's size and scale as the fourth largest pure cosmetics group globally operating through four well-established brands (Natura, Avon, The Body Shop and Aesop) with significant cross-selling and synergies opportunities. The company's leading market position in several markets where it operates and good geographic diversification, although with a high concentration of operations in growing, but potentially volatile, developing markets also support the rating,” Moody’s said in a press release.

Moody's also gave a Ba3 issuer rating to Avon Products, Inc. Avon's corporate family rating was withdrawn, and the Ba3 rating assigned to the senior unsecured notes issued by Avon and stable outlook remain unchanged.

The notes are part of Natura's liability management strategy. The proceeds will be used to pay down Natura Cosmeticos' upcoming debt maturities, namely its R$2.1 billion of Brazilian debentures due 2021 and the $750 million of international notes due 2023.

The outlook is stable.

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