Fitch Frowns on Aracruz

Fitch Frowns on Aracruz

Funds

Fitch has put the BBB rating of Aracruz Celulose on rating watch negative after its takeover by VCP to form a leading global producer of market pulp. Fitch says it is likely to downgrade Aracruz to BBB minus at the conclusion of a merger. “For the past five years, the average net debt-to-Ebitda ratio of Aracruz has been 1.6x, which is significantly lower than the 2.5x ratio the new company is expected to maintain,” says the agency. The combined firm will nonetheless enjoy both economies of scale

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