Moody's rates Biosev notes Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating to Biosev SA.

At the same time, the agency assigned a B1 rating to the proposed $500 million senior unsecured notes to be issued by Biosev Finance International BV (Netherlands) with an unconditional guarantee from Biosev SA and Biosev Bioenergia SA

The proceeds of the proposed notes will be used to repay existing debt.

The outlook is stable.

"The Ba3 rating reflects Biosev's business model that comprises scale and diversification coupled with the extensive use of strategic market intelligence, its close ties with global commodity player LDC and the positive medium-term fundamentals for the Brazilian sugar and ethanol industry," Moody's analyst Erick Rodrigues said in a news release.

"On the other hand, for the 2013/14 harvest year, Biosev will have to sustain the negative impacts that adverse weather infringed on its crops, which will limit the company¥s production levels and delay the ramp up in used capacity. As a result, in the short-term, the ability to dilute costs is reduced and operational margins should be pressured. Nevertheless, ongoing investments in expansion and productivity of its plantations should help the company reduce idle crushing capacity and improve profitability over time."

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