Celulosa Arauco (Celara) is facing significant ratings pressure with a 'Deteriorating' outlook from UBS as leverage reaches 7.6x during the construction of the USD 4.6bn Sucuriú Project. While at risk of becoming a 'fallen angel', the company maintains strong liquidity and support from its parent company.
Key Takeaways
- 1.Celara faces potential downgrades from Moody's and S&P to non-investment grade ('fallen angel' status) due to high leverage and negative outlooks.
- 2.Company leverage has spiked to 7.6x as of March 2026, driven by the USD 4.6bn Sucuriú Project and weak pulp pricing.
- 3.Despite deteriorating credit metrics, refinancing risk remains low due to strong cash positions and support from parent company Empresas Copec.
Table of Contents
- The Sucuriú Project
- Soft 1Q26
- Leverage further deteriorates...
- ... but refinancing risk stays low
- Credit ratings
- Risk factors
- Our bottom line
- Required disclosures
- UBS CIO risk views
- UBS CIO valuation views
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Authors
Donald McLauchlan
Securities
CELARACelara 4.2% bond due in 2030Empresas Copec
Themes
Fallen Angel RiskCapital Expenditure Pressure
Regions
Latin AmericaChileBrazil