S&P downgrades Coruripe

S&P said it lowered its global scale corporate credit rating to B+ from BB- on Usina Coruripe Acucar e Alcool SA (Coruripe).

The agency also lowered its long-term national scale corporate credit rating to brA from brA+ and affirmed the brA-1 short-term national scale rating on the company.

The outlook is negative.

S&P said the downgrade reflects Coruripe's weaker EBITDA and cash flow generation in fiscal 2018 that ended on March 31, which resulted in higher-than-expected leverage levels.

“Drier weather at the end of the last harvest season reduced crushing volumes, which along with the steep decline in sugar prices since the second half of 2017, lowered the company's EBITDA by around 20% compared with our forecasted level,” the agency said in a news release.

“At the same time, Coruripe's liquidity was trimmed following the low free cash flow generation, combined with the cash sweep feature that obliges the company to use any excess cash to reduce debt within the scope of the debt renegotiation agreement of 2016.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.