Investor Relations

POR

Indebtness and Ratings

Indebtedness and Financial Investments

Gross debt on June 30 was of R$24,602 million, a R$4,388 million increase in relation to the end of 1Q19, mainly due to new funding for lengthening average debt maturity and also to face the new investment cycle initiated with the Puma II Project. Among these fundraising operations, it is important to highlight two note issues, one with a maturity of 10 years and the other, 30 years, the amount of each totaling US$500 million. Of the Company’s total debt, R$18,491 million, or 75% (US$4,825 million) are US dollars denominated considering associated Real to dollar rate swaps.

Within this spectrum, the continuity of the liability management program through debt refinancing pushed forward the average loan maturities from 52 months in 1Q19 to 94 months at the end of 2Q19 - 40 months for domestic loans and 110 for currency loans. It’s also important to highlight that, even with the debt rollover, the average cost for these operations remained stable when compared to previous periods, being 7.6% p.a. for local currency debt, and 5.6% p.a. plus exchange rate fluctuation for foreign currency denominated debt.

The company’s position in cash and cash equivalents at the end of the quarter amounted to R$11,458 million, R$3,998 million more than at the end of the 1Q19, also reflecting new funding operations enrolled by the Company’s. In addition to this amount, Klabin signed a revolving credit facility of US$500 million at the beginning of the year with a 5-year term at a cost of 0.4% p.a. Should the line be drawn, the cost would be Libor + 1.35%p.a. As a result, Klabin's liquidity position at the end of 2Q19, namely cash and cash equivalents plus the revolving credit line is R$13,374 million, equivalent to the amortizations of loans maturing over the next 77 months

Consolidated net debt on June 30, 2019 amounted to R$13,144 million, a R$390 million increase compared with March 31, 2019, largely reflecting the beginning of disbursements for the Puma 2 Project, in addition to the prepayment of REFIS. On the other hand, the increase in adjusted EBITDA meant that Klabin’s adjusted Net Debt/EBITDA ratio remained flat at 3.0x, the same as at the end of 1Q19.

Rating

Agency Rating Outlook Latest Update
Standard & Poor's BB+ Stable Jun-17
Fitch Ratings BB+ Stable May-19
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