Fitch upgrades Natura & Co

Fitch Ratings said it upgraded its long-term foreign- and local-currency issuer ratings for Natura &Co Holding S.A. (Natura) and Natura Cosmeticos SA's to BB+ from BB and national scale rating to AAA(bra) from AA+(bra). Fitch also raised Natura & Co Luxembourg Holdings Sarl's unsecured notes to BB+ from BB.

Additionally, the agency said it affirmed Avon Products, Inc. and its unsecured notes at BB.

“The upgrades reflect Natura's sustainably conservative capital structure, following the past year of asset sales, and its strategy to streamline operations. The company has raised $2.6 billion in asset sales and effectively paid down 55% of its debt (around R$7.6 billion). The stronger financial profile and financial flexibility better positioned the company to navigate current challenges, like the completion of Avon's turnaround and the profitability rebound at Natura Latam, its core operation.

“The net adjusted leverage ratio, which is stronger for the rating category, is expected to remain below 1.5x in the medium to long term,” Fitch said in a press release.

The outlook is stable.

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