VCP-Aracruz Ratings See-Saw

VCP-Aracruz Ratings See-Saw

Funds

Moody's has upgraded Aracruz Celulose to Ba1 (negative) from Ba2 and cut Votorantim Celulose e Papel (VCP) to Ba1 (negative) from Baa3 after the latter bought the former for BRL5.42bn. “Despite its excessive leverage as measured by Total Adjusted Debt to Ebitda that could peak at around 8.7x at 2009 year-end (7.7x on a net debt basis) if weak market conditions persist through the rest of the year, the upgrade reflects the equalization of Aracruz's and VCP's ratings as we expect the two companies

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