Moody's rates Votorantim Cimentos notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to the proposed €500 million senior notes due 2022 to be issued by Votorantim Cimentos SA. The company’s Baa3 long-term issuer rating and the Baa3 rating on its existing senior notes are unchanged, and the outlook is stable.

Proceeds will be used to refinance existing debt obligations and for general corporate purposes.

The agency said Votorantim Cimentos' Baa3 ratings reflect its leading position in the Brazilian cement market, strong credit metrics, adequate liquidity, large scale, integrated operations and affiliation with Votorantim Participacoes SA (Baa3/stable).

Constraining the ratings are the still modest operating performance in the United States, Europe and Asia, economic slowdown and corruption investigations affecting the heavy construction market in Brazil and CADE's (Brazil’s antitrust authority) decision to rule against the largest cement companies in the country, including Votorantim Cimentos, which was convicted for price fixing and cartel formation and fined R$1.5 billion, Moody’s said.

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