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Moody's affirms Suzano
Moody's Investors Service said it affirmed the Baa3 global scale rating and Aa1.br Brazilian national scale rating assigned to Suzano Papel e Celulose SA's senior debentures due in 2014 and 2019 and the Baa3 foreign-currency rating assigned to Suzano Trading Ltd.'s senior guaranteed bonds due 2021.
The outlook is stable.
The affirmation follows the announcement that Suzano agreed to acquire a 50% stake in Consorcio Paulista de Papel e Celulose - Conpacel and 100% of KSR Distribuidora from Fibria Celulose SA for R$1.5 billion.
In the agency's view, the acquisitions will add scale to Suzano's paper operations and further strengthen its position in the Brazilian paper market.
Suzano's ratings consider its position as a low-cost producer of bleached eucalyptus kraft pulp paper, a high level of vertical integration, the favorable location of its paper plants and its prudent financial management as evidenced by its solid liquidity position and good risk-management practices, Moody's said.
The company's operational diversity is constrained by the concentration of market pulp production in the Mucuri site location, the agency said, and Suzano has significant exposure to foreign currency as a large portion of its costs are in the local currency while revenues are linked to the dollar.
As of Sept. 30, the total adjusted net debt-to-EBITDA ratio was 3.4 times.
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