S&P cuts Empresas, Inversiones

Standard & Poor's said it lowered Empresas CMPC SA and its wholly owned subsidiary Inversiones CMPC SA to BBB+ from A- and removed them from CreditWatch.

Ratings were placed on CreditWatch with negative implications on Sept. 23, for the company's announcement of the acquisition of Guaiba, a business unit of Aracruz Celulose SA.

The outlook is negative.

"The rating action reflects the company's weakening financial risk profile as a result of significant debt increases, particularly during the past year, to finance capital expenditures and acquisitions, amid diminishing operating returns because of adverse market conditions," S&P analyst Luciano Gremone said in a statement.

"Also, we expect that CMPC's business profile will weaken somewhat on higher exposure to volatile pulp prices."

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