Fitch Downgrades Ceagro to 'RD'

NEW YORK--()--Fitch Ratings has downgraded Ceagro Agricola Ltda's (Ceagro) foreign and local currency Issuer Default Ratings (IDRs) to 'RD' from 'C' and the national scale rating to 'RD (bra)' from 'C (bra)'. Fitch has also affirmed Ceagro's senior notes at 'C/RR4'.

KEY RATING DRIVERS

The downgrades follow the expiration of the 15-day grace period after the non-payment of the company's interest payments for its May 2016 senior notes. Payment of the bond was due on May 16, 2015 with the 15 day grace period expiring on May 31, 2015.

The company is currently negotiating with banks for a 60 days standstill agreement, and KPMG has been hired to provide lenders with an assessment of its liquidity and cash flow forecasting, and provide its views on a potential recovery plan.

RATING SENSITIVITIES

The company's ratings could be revised to 'D' from 'RD' pursuant to Fitch's rating definition. An upgrade is unlikely at this time.

FULL LIST OF RATING ACTIONS

Fitch has taken the following rating actions on Ceagro Agricola Ltda:

--Foreign and local currency IDRs downgraded to 'RD' from 'C';

--National scale rating downgraded to 'RD (bra)' from 'C (bra)';

--USD100 million senior notes due 2016 affirmed at 'C/RR4'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage (pub. 28 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749393

Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers (pub. 18 Nov 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=813588

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985710

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Johnny Da Silva
Director
+1-212-908-0367
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Gisele Paolino
Director
+55 21 4503 2624
or
Committee Chairperson
Daniel R. Kastholm, CFA
Managing Director
+1-312-368-2070
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Johnny Da Silva
Director
+1-212-908-0367
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Gisele Paolino
Director
+55 21 4503 2624
or
Committee Chairperson
Daniel R. Kastholm, CFA
Managing Director
+1-312-368-2070
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com