CMPC Eyes Debt, Equity Raises

Chilean paper and pulp producer CMPC says it plans to issue up to $500m in bonds and up to $500m in equity to pay for Fibria’s Guaiba unit in Brazil. Chilean research shop Celfin capital says CMPC can afford this, given its low debt profile, high cash flow, and globally-competitive low-cost structure. “In our view the capital increase is ideal, as it allows the firm to maintain present coverage levels, while addressing liquidity issues – and because it would also reverse S&P’s CreditWatch negative outlook,” according to Celfin analysts. It adds that in its view CMPC’s financial profile could support the capital increase, since as it has $2.0bn in financial liabilities, $576.5m in cash and equivalents and net debt of $1.4bn.