Moody's changes Votorantim Participacoes outlook to positive

Moody's Investors Service said it changed the outlook for Votorantim Participacoes SA to positive from stable and affirmed its Baa3 global scale ratings and Aa1.br national scale ratings.

Also affirmed were Votorantim Industrial's Baa3 global scale rating and Aa1.br national scale rating, Companhia Brasileira de Aluminio's Baa3 global bonds and Votorantim Cimentos SA's Baa3 global bonds.

The agency said the change in outlook was prompted by the potential benefit arising from the initial public offering of the company's cement business, with expectations for a gradual leverage reduction and enhanced liquidity position.

Votorantim's Baa3 ratings are supported by the company's size and scale as one of the largest conglomerates in Brazil, its diversified business portfolio and its strong liquidity profile based on the maintenance of a high cash position, committed credit facilities and large degree of unencumbered assets, Moody's said.

Constraining the ratings are the commodity nature of a substantial portion of Votorantim's business portfolio (namely metals, mining and market pulp), the challenging operating environment for its metals and mining business and the company's leveraged capital structure when compared to other companies rated at the same level, the agency said.

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