Fitch cuts Masisa outlook to negative

Fitch Ratings said it revised Masisa SA's outlook to negative from stable and affirmed the company's local- and foreign-currency issuer default ratings at BBB-, national scale and local bond ratings at A(chl) and private placement due May 15, 2008 at BBB-.

The agency said the change in outlook reflects the weakness of the company's ratings in their respective categories and that without significant debt reduction during 2007, Masisa's ratings will likely be downgraded by the end of the year.

Masisa generated $154 million of EBITDA during 2006, a decline from $158 million in 2005, and had a total debt-to-EBITDA ratio of 3.9x at Dec. 31. Masisa's performance in 2006 has been hindered by high raw material costs for wood and resin and a contraction of the U.S. housing market, which has hurt pricing and demand for some of the company's key products, Fitch said.

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