Fitch downgrades Biosev to B+

Fitch Ratings said it downgraded Biosev SA's long-term foreign and local currency issuer default rating to B+ from BB- and its long-term national scale rating to A-(bra) from A+(bra).

The outlook was revised to stable from negative.

Fitch said the downgrade incorporates Biosev's challenges to achieve positive free cash flow (FCF) and reduce leverage to levels compatible with the previous issuer default rating.

While the scenario for sugar and ethanol prices have improved recently and larger crushed volumes are expected for Biosev in the ongoing crop season, the combination of Biosev's heavy agricultural and industrial investments needed to improve agricultural yields and reduce idle capacity of its mills with high interest and FX rates are expected to hold back expected improvements of its FCF and leverage ratios.

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