Fitch lowers Yasar to stable

Fitch Ratings said it revised the outlook of Yasar Holding's to stable from positive.

The agency also affirmed its long-term foreign-currency issuer default rating and senior unsecured rating at B.

Also affirmed includes the senior unsecured rating of the pass-through notes issued by the special purpose vehicle Willow No. 2 (Ireland) plc at B with a recovery rating of RR4. Its national rating was affirmed at BBB+ (tur). Willow's outlook also was revised to stable from positive.

The ratings continue to reflect Yasar's diverse range of products in its core segments of food, beverages and coatings, Fitch said, and strong market shares within particular product categories.

This is partially offset by the challenges of managing a widely diversified group of companies, given the lack of synergies between some of the segments and the recurring outlay of resources required for maintaining a competitive and growth profile for each of them, the agency said.

The outlook revision reflects the weakness of the company's cash flow generation and higher leverage in 2011, as well as the prospect for an insufficient recovery to merit a ratings upgrade, Fitch said.

Increasing advertising and promotion expenditure and a demonstrated vulnerability to raw material price increases will continue to drive some volatility in Yasar's operating results, the agency added.

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