Moody's downgrades Eldorado's rating from Ba2 to Ba3, with stable outlook

Moody's Ratings downgraded the rating of Eldorado Brasil Celulose from Ba2 to Ba3, with a stable outlook. In August, the credit rating agency placed the company's rating under review for downgrade following the acquisition of Paper Excellence's stake in Eldorado by J&F for R$ 15 billion. The downgrade reflects the perception that leverage will remain high, along with governance risks. Moody's assesses that the transaction created an unbalanced capital structure for Eldorado, which pressured short-term liquidity while increasing refinancing risk. "During the review period, Eldorado implemented a liability management plan aimed at mitigating the short-term nature of its new debt and extending maturities to reduce refinancing pressure," the rating agency evaluates. The management used R$ 3.7 billion in revenues from sales of surplus forest assets and swaps to reduce gross debt and issued long-term local market instruments that were incentivized. "These actions contributed to ...