Moody's ups Eldorado Brasil Celulose

Moody's Investors Service said it upgraded to B1 from B2 the corporate family rating of Eldorado Brasil Celulose SA.

The agency also changed the outlook to stable from under review. This action concludes the review started on Feb. 11, Moody’s said.

Moody's put Eldorado's ratings on review for downgrade because of the high refinancing risk. As of December 2020, Eldorado had about R$5.6 billion, or over 70% of its total debt, due until the end of 2021, including its $350 million of senior unsecured notes due in June. On Tuesday, Eldorado announced its board approved the contracting of debt instruments which will improve the company's liquidity and allow the company to amortize the upcoming bond maturity.

“The upgrade of Eldorado's CFR to B1 reflects the substantial decrease in refinancing risk as the company will be able to amortize the $350 million senior unsecured notes due in June 16, 2021 with new bank debt raised in May 2021. The debt refinancing will remove immediate liquidity pressures. The stable outlook reflects the expectation that, once the shareholders dispute is resolved, the company will be able to extend debt maturities,” Moody’s said in a press release.

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