S&P downgrades Natura

S&P said it lowered its global scale issuer credit and issue-level ratings to BB- from BB, and its national scale issuer credit and issue-level ratings to brAA+ from brAAA on Natura Cosmeticos SA. The recovery rating on the unsecured debts remains at 3 (50%). At the same time, S&P removed all ratings from CreditWatch with negative implications, where it placed them on March 25.

Natura completed the acquisition of Avon Products Inc. on Jan. 3. Both companies are now controlled by Natura&Co. Holding SA.

“Natura and Avon are legally independent entities, with no cross guaranteed debt between them, but Natura&Co fully owns both companies. The group’s credit profile drives the rating on Natura due to its importance to the group – representing about 75% of total EBITDA – its integral role to the business strategy, and cash flow contribution. In addition, the former controlling shareholders of Natura will control Natura&Co, and the group will inherit the board and senior management of Natura,” said S&P in a press release.

The outlook is stable.

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