Moody's: Votorantim outlook stable

Moody's Investors Service said it revised the outlook on Votorantim Participações SA's Baa3 global-scale issuer rating to stable from positive and affirmed the company's Aaa.br Brazilian national scale issuer rating and the Baa3 foreign-currency rating assigned to Votorantim Overseas Trading Operations - Voto III's $300 million guaranteed senior unsecured notes due 2014.

The agency said the outlook change reflects the sharp decline in prices and demand for all commodities produced by the group in the recent months, although Moody's expects the impact on revenues and cash flows will be partially offset by the recent devaluation of the Brazilian real.

The Baa3 issuer rating reflects the combination of the group's size as one of the largest Brazilian conglomerates with good business diversification, its cost-competitive operations that have supported good operating margins on a consolidated basis and its leading market positions in virtually all operating segments in Brazil, Moody's said.

The total debt-to-EBITDA ratio is high for the rating category at 4.9 times as of Sept. 30, the agency said, and transparency remains a constraining factor on Votorantim's rating despite recent improvements.

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