Pulp and electricity producer ENCE Energia y Celulosa S.A. (Ence) performed below our expectations in 2016 as a result of lower-than-expected profitability in the pulp business (due to lower realized pulp prices and a turbine breakdown at one of its pulp mills), higher investments (including acquisition of biomass plants), and higher shareholder remuneration. Consequently, the company did not reach credit metrics that we consider in line with a higher rating and we think it is unlikely these levels will be reached in the coming years. This is due to our expectations of lower pulp prices (we now expect $670 per ton compared with $700 previously), the company's growth focus, and its relatively shareholder-friendly financial policy. We are therefore revising the
