OREANDA-NEWS. S&P Global Ratings today affirmed its 'BB+ (sf)' rating on Voto-Votorantim Overseas Trading Operations IV Ltd.'s (VOTO's) US$400 million 7.75% notes and removed it from CreditWatch negative. The rating actions follow the Sept. 1, 2016, rating affirmation on Votorantim S. A., the ultimate guarantor of the notes.

In June 2005, VOTO issued US$400 million of notes on behalf of Votorantim Group, a Brazilian industrial conglomerate comprising Votorantim Participacoes S. A. (VPAR), now called Votorantim S. A. (VSA), Votorantim Celulose e Papel S. A., now called Fibria Celulose S. A. (FC), and Cimento Rio Branco S. A., now called Votorantim Cimentos S. A. (VC), which jointly, severally, unconditionally, and irrevocably guarantee the timely payment of all amounts due on the notes. FC's and VC's liability is limited to 50% of the notes' outstanding amount, and thus VSA fully guarantees 100% of the notes' outstanding amount.

On Jan. 13, 2016, we withdrew our 'BBB-' global scale and 'brAAA' national scale corporate credit ratings on VPAR following the merger of VPAR and Votorantim Industrial S. A. (VID). VID, now called VSA, is currently the ultimate holding company of the Votorantim Group and our 'BB+' rating on the notes reflects our rating on this entity.

On Sept. 1, 2016, S&P Global Ratings affirmed its 'BB+' global scale and its 'brAA+' Brazilian national scale corporate credit ratings on VSA and removed the ratings from CreditWatch negative. The outlook is negative. The rating affirmation reflects our understanding that VSA would be able to withstand our hypothetical stress scenario in the case of a sovereign default in Brazil. The negative outlook on VSA reflects the outlook on Brazil. For more information, see "Votorantim 'BB+' Ratings Affirmed And Off Watch Negative; Outlook Negative," published Sept. 1, 2016.

We do not place outlooks on structured finance transactions, but any downgrade on VSA would lead to a downgrade on the notes.