Fitch upgrades Empresas Iansa

Fitch Ratings said it has upgraded Chile-based Empresas Iansa SA's foreign- and local-currency issuer default ratings and $100 million senior unsecured notes due 2012 to BB+ from BB. Fitch also assigned an A-(ch) national scale rating to the company.

The outlook is stable.

The agency said the upgrade is supported by the improvement of Iansa's credit protection measures as a result of debt reduction. Since the end of 2005, higher sugar prices have translated into improved profitability and cash flows. The company has used free cash flow generation to reduce debt levels, which together with higher EBITDA has strengthened credit ratios. Fitch said the ratings are also supported by Iansa's strong business position as the sole producer of sugar in Chile, its low cost structure and the existence of price protection mechanisms in the domestic sugar market.

The ratings also incorporate the exposure of the company's agricultural businesses to weather conditions, supply and demand imbalances and competition from sugar substitutes, the agency added.

Net debt to EBITDA is 1.9x.

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