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Bond Market News
Votorantim Upgraded to BBB by Fitch
September 25, 2024
Votorantim S.A. has been upgraded by a notch to BBB from BBB- by Fitch. The upgrade comes on back of strengthening of business profile of the company due to greater portfolio diversification and increasing exposure to developed markets. The company’s cement and zinc businesses are globally competitive due to strong market positions and adequate cost structures. Currently, Votorantim has almost no debt at the holding level and around BRL322mn ($59mn) in other small segments, including Altre. Fitch expects the company to continue to move cash to support key subsidiaries as needed, as it did with Votorantim Cimentos S.A during the sharp economic downturn in pre-pandemic Brazil. Fitch forecasts a consolidated EBITDA of BRL11bn ($2bn) in 2024 and BRL11.3bn ($2.1bn) in 2025 with expectation of net debt-to-EBITDA remaining stable at around 1.0x for the next three years.
Votorantim’s bonds traded stable with its 4.375 2025s at 99.3, yielding 5.18%.
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