...Negative Outlook: Corporacion Azucarera del Peru S.A.'s (Coazucar) Negative Outlook is due to deteriorating EBITDA margins from structural changes in the pricing premium Peruvian sugar producers enjoyed relative to their international peers. These price changes increased Coazucar's leverage while it was in the midst of around USD200 million of capex related to the Olmos project. In addition, beginning in November 2014, Coazucar must make annual payments of around USD9 million for water resources for the Olmos project. Strong Business Position: Coazucar is the largest sugar producer in Peru with a market share of about 45%. The company has a low-cost structure and high operating margins due to the proximity of its mills to the sugar cane fields, its low dependence on third-party sugarcane producers and high sugar cane yields per hectare. Increasing Leverage, Weak Liquidity: Coazucar's net leverage ratio of 4.8x for the LTM ended March 2014 compares unfavorably with 2.0x at the end of 2012....
