S&P rates Votorantim Cimentos notes BBB

Standard & Poor's said it assigned a BBB debt rating to Votorantim Cimentos SA's senior unsecured notes due 2021.

The agency said it expects the company to use proceeds to fund the 2017 notes tender offer.

The company's BBB corporate rating reflects the ratings on Votorantim Industrial SA as Votorantim Cimentos is considered as its core subsidiary, S&P said.

The agency said the corporate governance for both companies has significantly improved in recent years and the degree of separation from one company to the other has increased after the group's corporate reorganization in 2014.

Nevertheless, S&P said it assumes Votorantim Cimentos will remain the main cash generator for Votorantim Industrial and that the latter would continue to exercise control over the use of Votorantim Cimentos' cash flows and determine its main financial policies.

The agency said it expects Votorantim Cimentos' stable revenue stream and EBITDA margins, coupled with stronger financial metrics, will enable Votorantim Cimentos to upstream an important flow of resources to Votorantim Industrial.

Votorantim Cimentos enjoys a leading position in the Brazilian cement market and an efficient distribution network and cost structure that enables the company to post above-average margins in the global cement industry, S&P said.

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