Fitch rates Natura, notes BB

Fitch Ratings said it assigned BB long-term foreign and local currency issuer default ratings and a national scale rating of AA(bra) to Natura Cosmeticos SA.

The agency also assigned a BB(EXP) rating to Natura's proposed senior unsecured notes, in the amount of up to $1.15 billion, due to 2023 or 2025.

Proceeds will be used to repay the promissory notes issued to finance the acquisition of The Body Shop (TBS).

The outlook is stable.

“Natura's ratings reflect its solid business position in the Cosmetics, Fragrances and Toilette (CF&T) sector in Brazil and Latin America which is due to its strong brand value and recognition, large operating scale, elaborate direct sales structure and track record of maintaining a solid capital structure,” Fitch said in a news release.

“Natura's current ratings are pressured by high leverage due to its recent debt-financed acquisition of TBS for €1 billion.”

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