Moody's rates Votorantim notes Ba1

Moody's Investors Service said it assigned a Ba1 foreign-currency rating to the proposed $1 billion in senior unsecured notes to be issued in two equal-sized series due 2016 and 2019 by Fibria Overseas Finance Ltd. (Cayman Islands) and to be guaranteed by Votorantim Celulose e Papel SA.

The agency also affirmed Votorantim's corporate family rating at Ba1 on the global scale and Aa2.br on the Brazilian national scale.

The outlook is negative.

The proceeds will be used to prepay existing derivatives-related debt at Votorantim subsidiary Aracruz Celulose SA.

Moody's said the Ba1 rating reflects Votorantim's leading position as the largest producer of market pulp in the world and its extremely competitive production costs, which are among the lowest worldwide based on a long-term sustainable business model that includes structural cost advantages when compared with most international peers, including self-sufficiency in wood fiber and electricity, and efficient logistics.

Votorantim's relative low product diversity and its relative small size when compared to global peers as measured by net revenues are constraining factors for its rating, the agency said.

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