Research Update: Spanish Pulp Producer ENCE Energia y Celulosa Outlook Revised To Negative On Lower Prices; Ratings Affirmed At 'BB' - S&P Global Ratings’ Credit Research

Research Update: Spanish Pulp Producer ENCE Energia y Celulosa Outlook Revised To Negative On Lower Prices; Ratings Affirmed At 'BB'

Research Update: Spanish Pulp Producer ENCE Energia y Celulosa Outlook Revised To Negative On Lower Prices; Ratings Affirmed At 'BB' - S&P Global Ratings’ Credit Research
Research Update: Spanish Pulp Producer ENCE Energia y Celulosa Outlook Revised To Negative On Lower Prices; Ratings Affirmed At 'BB'
Published Nov 18, 2019
7 pages (3020 words) — Published Nov 18, 2019
Price US$ 225.00  |  Buy this Report Now

About This Report

  
Abstract:

We have lowered our 2019 and 2020 EBITDA forecast for Spanish eucalyptus-based-pulp producer ENCE Energia y Celulosa (ENCE), because of weaker realized pulp-price expectations. We now expect funds from operations (FFO) to debt to fall below our rating threshold (20%) in 2019. However, we expect the ratio to improve to 22% by 2020, thanks to incremental EBITDA from investments in 2019 and cost-saving initiatives. We are therefore revising our outlook on ENCE to negative from stable. Our 'BB' long-term issuer credit rating remains unchanged. The negative outlook reflects a one-in-three likelihood of a one-notch downgrade in the next 12 months, if FFO to debt falls below 20%. The outlook revision to negative from stable reflects the potential for a lower

  
Brief Excerpt:

...- We have lowered our 2019 and 2020 EBITDA forecast for Spanish eucalyptus-based-pulp producer ENCE Energia y Celulosa (ENCE), because of weaker realized pulp-price expectations. - We now expect funds from operations (FFO) to debt to fall below our rating threshold (20%) in 2019. However, we expect the ratio to improve to 22% by 2020, thanks to incremental EBITDA from investments in 2019 and cost-saving initiatives. - We are therefore revising our outlook on ENCE to negative from stable. Our '##' long-term issuer credit rating remains unchanged. - The negative outlook reflects a one-in-three likelihood of a one-notch downgrade in the next 12 months, if FFO to debt falls below 20%....

  
Report Type:

Research Update

Issuer
ENCE Energia y Celulosa S.A.
GICS
Paper Products (15105020)
Sector
Global Issuers
Country
Spain
Region
Europe, Middle East, Africa
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Research Update: Spanish Pulp Producer ENCE Energia y Celulosa Outlook Revised To Negative On Lower Prices; Ratings Affirmed At 'BB'" Nov 18, 2019. Alacra Store. May 15, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-Spanish-Pulp-Producer-ENCE-Energia-y-Celulosa-Outlook-Revised-To-Negative-On-Lower-Prices-Ratings-Affirmed-At-BB-2341554>
  
APA:
S&P Global Ratings’ Credit Research. (). Research Update: Spanish Pulp Producer ENCE Energia y Celulosa Outlook Revised To Negative On Lower Prices; Ratings Affirmed At 'BB' Nov 18, 2019. New York, NY: Alacra Store. Retrieved May 15, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-Spanish-Pulp-Producer-ENCE-Energia-y-Celulosa-Outlook-Revised-To-Negative-On-Lower-Prices-Ratings-Affirmed-At-BB-2341554>
  
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