Adding yet more grist to the Latin American mill, Aracruz Celulose roadshowed a 144A/Reg S private placement last week via Citigroup. The Brazilian wood-pulp producer is out with a seven-year legal final deal for up to US$400 million through vehicle Arcel Finance Limited, according to sources. Investors have packed in roughly US$947 million of Latin ABS so far in the third quarter, with US$247 million of that coming from exporters like Aracruz. Yet the word "glut" is not on anyone's lips. "We're still looking, and with the tightening in Brazil, we're looking for something with a little extra," said one investor keen on the Aracruz transaction.

Recent blemishes on the corporate's credit standing do not appear to have provoked trouble for the structured issue. In mid-July, Moody's Investors Service dropped the outlook on its Baa3' global-scale local currency rating to negative from stable. While the scale of its bleached pulp operation has helped make the company the world's most efficient producer of the eucalyptus variety, its ruthless focus on a single commodity has reinforced a vulnerability to price swings. "The company's reliance on uncommitted credit lines and continued heavy concentration of production at a single site also restrain ratings," said Moody's in a report on the corporate.

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