Moody’s gives Ba3 to ENCE notes

Moody's Investors Service said it assigned a provisional Ba3 rating to the issuance of €250 million senior unsecured notes due 2022 to be issued by ENCE Energia y Celulosa, SA and guaranteed by various group subsidiaries.

The outlook is stable.

Proceeds will be used to refinance the existing €225 million senior secured notes callable in October 2018.

Moody’s said the provisional Ba3 rating for the unsecured notes is in line with the Ba3 corporate family rating. While the agency considers the effectiveness of the ring-fencing of the restricted group as weak (€63.3 million inter-company loan from ENCE to entities of the unrestricted group, which consists of its energy assets, and ability to reinvest €75.9 million of assets held for sale from the restricted group into the unrestricted group), it noted that creditors of the unrestricted group only have security over 27.8% of consolidated group assets.

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