Fitch rates Brazil Tonon Bioenergia IDRs at B, outlook stable

Jan 9, 2013 - Fitch Ratings said yesterday it had assigned Brazilian sugar, ethanol and bio-electricity group Tonon Bioenergia foreign and local currency issuer default rating (IDRs) at B, with a stable outlook.
According to Fitch, the ratings reflect the limited scale of Tonon's businesses operations and its exposure to the cyclical nature of sugar and ethanol sector, which features significant price oscillations and agribusiness-inherent risks.
Moreover, government interference in petrol (gasoline) and ethanol prices' formation along with other relevant energy policies may affect ethanol segment's profitability, according to the agency.
Fitch also rated Tonon's USD-200 million (EUR-152.9m) proposed senior unsecured bonds set to mature in 2020 at B/RR4.
Resources to be raised from the issuance are earmarked for prepayment of the company's existing senior secured debt and for working capital purposes.
(USD 1 = EUR 0.765)
Rating agency website: www.fitchratings.com

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