Fitch rates Eldorado notes BB+/RR4

Fitch Ratings said it assigned a B+/RR4(EXP) rating to the proposed 2023 notes to be issued by Eldorado International Finance GmbH, and guaranteed by Eldorado Brasil Celulose SA and Cellulose Eldorado Austria GmbH.

Proceeds from these senior unsecured notes, which are expected to total $500 million, will be used to extend the company's debt maturity profile.

Fitch said the rating reflects Eldorado's stronger cash flow due to the depreciation of the Brazilian real during 2015, which accelerated the deleveraging of the company's balance sheet.

The ratings incorporate that Eldorado will likely enter into a new investment cycle and leverage will temporarily increase during 2017 and 2018. After 2019, a fast deleveraging is expected due to stronger cash flow generation capacity from the second pulp mill.

The company has a manageable liquidity, and Fitch said it expects an improvement in the company's liquidity and lower refinancing risk.

Eldorado's limited financial flexibility from its forest base was also incorporated in the analysis.

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