Fitch affirms Natura Cosmeticos

Fitch Ratings said it affirmed Natura Cosmeticos SA's long-term foreign currency issuer default rating, local currency issuer default rating, and its unsecured $750 million notes due 2023 at BB as well as its long-term national scale rating at AA(bra).

Fitch removed the rating watch negative that had been assigned to Natura following its announced acquisition of Avon Products, Inc. (B+/positive) and has assigned a negative outlook.

The actions follow an announcement on Jan. 3 that the acquisition was completed.

The agency said Natura's negative outlook and Avon's positive outlook reflect Fitch's expectation that the credit quality of both entities will migrate to around BB- during the next 12 to 24 months, as debt at both entities could likely be replaced by debt at the holding company, Natura & Co., with upstream guarantees from both entities.

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