Aracruz Reported to Close Derivative Positions

Brazil’s Aracruz Celulose has agreed to close out negative foreign exchange derivatives positions of about $2.5 billion, according to Brazilian newspaper Valor Economico. According to the report, banks involved in the operations gave Aracruz three days to close positions Monday. An Aracruz spokeswoman declined to comment. The pulp and paper producer announced earlier this month that it had a negative derivative position of BRL1.95bn, but unlike other corporates, it chose not to close positions. Aracruz ratings have been cut to Baa3 from Baa2, and a potential tie-up with rival Votorantim has been put on ice.