Fitch rates Tupy notes BB

Fitch Ratings said it expects to assign a BB rating to Tupy Overseas SA’s proposed $350 million senior unsecured notes due 2021, which will be unconditionally and irrevocably guaranteed by Tupy SA.

The proceeds will be used to refinance part of existing debt.

Tupy currently has foreign- and local-currency issuer default ratings of BB and national long-term rating of AA(bra).

The outlook is stable.

The ratings reflect the sustainable way that Tupy has been increasing its cash flow from operations with relatively stable margins, combined with a conservative capital structure and healthy liquidity policy, Fitch said.

The ratings also consider the high exposure of Tupy’s business to the North American market and to large automakers, as well as the competitive environment, cyclicality and capital intensive characteristics of the automotive industry, the agency said.

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