Fitch upgrades Eldorado Brasil

Fitch Ratings said it upgraded Eldorado Brasil Celulose SA's long-term foreign- and local-currency issuer default ratings to BB- from B- and its national long-term rating to A+(bra) from BB-(bra). Fitch also raised the rating on the 2021 unsecured notes issued by Eldorado Intl. Finance GmbH to BB- from B-/RR4. Eldorado Brasil and Cellulose Eldorado Austria GmbH guarantee the notes.

The agency removed the rating watch negative and the outlook is stable.

“The upgrades reflect Eldorado's lower refinancing risk in the short term, following the unanimous approval of the board of directors to borrow and repay the company's $350 million notes in June. The company will retire the bond with a combination of $200 million of recently funded new bank debt and a portion of its cash position, R$1.6 billion ($286 million) as of March 31, 2021,” Fitch said in a press release.

Fitch said it sees Eldorado generating strong free cash flow of R$1.5 billion during the year.

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