SAO PAULO -- Standard Poor's Ratings Services assigned its 'BB-' ratings to Masisa S.A. and to its $300 million 9.5% coupon bond, issued on April 28, 2014. The outlook is stable.
SP says the ratings reflect the company's "fair" business risk profile and "aggressive" financial risk profile, as our criteria define these terms.
The company's business risk profile incorporates its exposure to Argentina (Unsolicited Ratings, CCC+/Negative/C) and Venezuela (B-/Negative/B).
"Operations in these two countries contribute about 50% of Masisa's consolidated EBITDA. Mitigating factors include Masisa's solid position in the markets in which it operates and its vertically integrated business model, which allows the company to reduce its dependence on retailers and result in less volatile operating profitability than those of its peers operating in the
wood panels business," said Standard Poor's credit analyst Diego Ocampo.
SP's "aggressive" financial risk profile assessment reflects the company's extensive use of debt to fund growth; its exposure to volatile currencies, specifically the Argentine peso and Venezuelan bolivar; and its ambitious growth model.