S&P: Grupo Farias notes B-

Standard & Poor's said it assigned a B- global scale and brBB- Brazil national scale long-term corporate credit ratings to Grupo Farias, which has the legal name Administradora Baia Formosa SA.

The agency also said it assigned a B- issue rating to the proposed $250 million senior unsecured notes issue by subsidiary Farias Finance International SA.

The ratings are the same as the global-scale corporate credit rating on Grupo Farias.

There is no significant subordination because the company will use part of the proceeds to amortize other secured loans, the agency said.

The ratings reflect the challenge that the company faces to increase production and productivity in the next several years by renovating its sugarcane fields, a growth strategy based on large capital expenditures, the agency said.

The ratings also consider the company's aggressive financial profile, which primarily consists of short-term debt, S&P said.

Partially offsetting these risks is its geographic diversification that enables it to produce sugarcane year round, compared with peers that produce only during harvest season in their region, the agency said.

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