S&P rates Coruripe, notes B

S&P said it gave preliminary B ratings to SA Usina Coruripe Acucar e Alcool and its planned $400 million to $500 million bond it will sell through subsidiary Coruripe Netherlands BV.

“If the company doesn't place the bond in the next 90 days, or if conditions are materially different from the assumptions we considered, we may withdraw or revise our ratings, which we expect could be one or more notches lower. Factors that could influence a revision include, but are not limited to, the use of bond proceeds, maturity, amount, hedge, financial and other covenants, security and ranking,” the agency said in a press release.

Coruripe is expected to use the proceeds to extend maturities and prepay debt, particularly its syndicated loan, to relieve liquidity pressures, the agency said.

The outlook is stable, reflecting the agency’s view that Coruripe will lower liquidity risks and exposure to foreign-exchange-rate variation after the bond issuance. S&P said it expects the company to maintain adjusted gross debt to EBITDA at 3x-3.5x in the next three years.

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