Fitch affirms Copec, Arauco

Fitch Ratings said it affirmed the BBB+ foreign- and local-currency issuer default ratings of Empresas Copec SA and its subsidiary Celulosa Arauco y Constitucion SA and the BBB+ issue ratings of Arauco's bonds due in 2007, 2009, 2010, 2011, 2013, 2015 and 2017.

The outlook remains stable.

The agency said the ratings of Copec are supported by its position as one of the largest private-sector companies in Chile with investments in forestry, fuel distribution, fishing and energy. On a consolidated basis for the 12 months ended Sept. 30, Copec generated $1.352 billion of EBITDA on $8.586 billion of consolidated sales.

Arauco's BBB+ ratings are supported by its strong business position and financial profile - the company is one of the largest producers of market pulp in the world and among the leading producers of panels and sawn timber. Fitch attributed the company's competitive advantage to its ability to produce these products at a very low cost due to its access to inexpensive fiber and its modern production equipment. Arauco also has low transportation costs vis-a-vis its global competitors due to the close proximity of its mills, forest plantations and ports.

Arauco's total debt-to-EBIDTA ratio is 2.4x.

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