Moody's cuts Camposol

Moody's Investors Service said it downgraded Camposol SA's corporate family rating and the rating of its $350 million of 6% senior unsecured notes due 2027 and guaranteed by its parent company, CSOL Holding Ltd. to B1 from Ba3. Moody's changed the outlook to negative from stable.

The downgrade is driven by an erosion in Camposol's credit metrics and increasing liquidity risk. “Higher costs of inputs, particularly fertilizers and freights, will continue challenging the company's performance through 2023, at least. The company reported a 21% decrease in EBITDA for the last twelve months ended June 2022 leading to Moody's adjusted leverage of 6.2x,” the agency said in a press release.

However, Camposol forecasts net leverage to retreat towards 3.3x by 2023 from 4.6x as of June 2022, which translates into gross leverage of 3.8x with Moody's adjustments.

The agency said higher input costs, higher interest expenses and negative working capital supports its view that material debt reduction through 2023 will be difficult.

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