Fitch ups Mastellone, notes

Fitch Ratings said it upgraded Mastellone Hermanos SA’s long-term foreign and local currency issuer default ratings to B from B- and senior unsecured notes to B/RR4 from B-/RR4.

The outlook is stable.

Fitch said the upgrade is due to the company's solid liquidity position and vastly improved credit metrics as a result of the $35 million capital injection from Arcor SAIC's (B+/positive) and Bagley Argentina SA, Arcor's subsidiary, during 2017.

“This capital increase further solidifies Mastellone's position as a long-term strategic investment for Arcor,” the agency said in a news release.

“The upgrade also reflects the expected improvement in Mastellone's operating performance because of improved operating performance and the expectation of the continuation of the Macri government's pro-business economic policies following the recent election. More than 90% of Mastellone's sales were made in Argentina during 2017 and the company is highly reliant upon producers of raw milk in the country.”

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