S&P rates Arauco bonds BBB

Standard & Poor's said it assigned a BBB rating to Celulosa Arauco y Constitucion SA's forthcoming senior unsecured 144-A 10-year bullet bonds of up to $400 million. The agency also said it affirmed its BBB corporate credit rating.

The outlook is stable.

The proceeds will be used to refinance a portion of its short-term debt and other general corporate purposes.

The ratings reflect an assessment of Arauco's business risk profile as "satisfactory" and its financial risk profile as intermediate, S&P said.

The company's satisfactory business risk profile results from its world-class cost position in forest management and pulp, lumber and panel production, the agency said.

This partially offsets its lack of product diversity, the commodity nature of its products and the cyclicality of the pulp market, S&P said.

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