S&P lowers Virgolino

Standard & Poor's said it lowered its global scale corporate credit and debt ratings on Virgolino de Oliveira SA – Acucar e Alcool (GVO) to CCC- from B.

The agency also lowered its Brazil national scale rating on the company to brCCC- from brBB-.

All ratings were placed on CreditWatch with negative implications.

S&P said the downgrade reflects tighter credit availability for GVO, which hampers the company's ability to refinance its short-debt term maturities and to fund its working capital needs, which has further pressured GVO's liquidity. The company has faced difficulties to roll over some maturities and has been gradually paying its debt it owes to Copersucar.

At the same time, GVO's operating cash flow generation will be weaker in 2015 than the agency previously estimated, because of the historically low global sugar and ethanol prices that currently don't indicate a recovery trend.

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