Fitch changes Celulosa Arauco view

Fitch Ratings said it affirmed the long-term foreign and local currency issuer default ratings for Celulosa Arauco y Constitucion SA at BBB and the national long-term rating at AA-(cl).

The outlook was revised to negative from stable.

The revision of the outlook reflects Fitch's projection that Arauco's net debt could approach $5.5 billion upon completion of the new pulp line in 2021, which represents a material increase from Fitch's original projection of $4.8 billion, the agency said.

“The increase in projected net debt is a result of weaker pulp prices than originally projected for 2019, and likely in 2020, which has decreased the operating cash flow that is available to fund the $2.35 billion project,” Fitch said in a news release.

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