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Fitch Takes Rating Actions on Votorantim Celulose e Papel (VCP) and Aracruz Celulose.

Article Excerpt
CHICAGO -- Fitch Ratings has downgraded the Foreign currency and local currency Issuer Default Ratings (IDR) of Votorantim Celulose e Papel (VCP) as follows:

--IDR to 'BB' from 'BB+';

--National Scale Rating to 'A+ (bra)' from 'AA- (bra)'.

Fitch has simultaneously upgraded the following ratings of Aracruz Celulose S.A. (Aracruz):

--Foreign and local currency IDR to 'BB' from 'BB-';

--National Scale Rating to 'A+ (bra)' from 'A (bra)'.

The Rating Outlook for both VCP and Aracruz is Stable.

Rating Actions Reflect Credit Convergence:

VCP and Aracruz's respective ratings of 'BB' and 'A+ (bra)' reflect the linkage of the credit quality of these two companies during the past nine months as a result of numerous transactions that have resulted in VCP increasing its ownership of Aracruz's voting shares to 99.6% from 28%. By the end of 2009, Aracruz is expected to be merged into VCP, and the company will be renamed Fibria S.A. It will have only one class of shares and will be jointly controlled by Banco Nacional de Desenvolvimento Economico e Social Participacoes S.A. (BNDESPar) and Votorantim Industrial S.A (VID) with stakes of...