OREANDA-NEWS. Fitch Ratings believes the severe El Nino phenomenon in Peru will pressure the results of Camposol Holding Ltd. (Camposol, 'B-'/Outlook Stable) and hinder its ability to refinance it USD200 million notes due Feb. 2, 2017. The severe El Nino phenomenon increases weather and water temperatures and heightens the risk of flooding and infrastructure damage in the Northern part of Peru where Camposol's plantations and shrimp ponds are located.

Camposol's net leverage was 7.4x as of Sept. 30, 2015. Fitch projects that the company's net leverage will decline to 6.5x by the end of 2015 and to 4.0x during 2016. The deleveraging of the company is due to a projected increase in EBITDA to USD54 million in 2016 from USD34 million in 2015. If the impact from El Nino is severe, Fitch believes Camposol's EBITDA could decline to below USD30 million in 2016.

Cash flow growth during 2016 is projected to come from higher sales volumes from the company's recently expanded avocado and blueberry plantations. During the first nine months of this year, avocados and asparagus accounted for 22% and 20% of the company's sales respectively, while blueberries only accounted for 6% of sales. Sales of shrimp and other seafood products represent about 13% of revenues.

Camposol expects to refinance its debt early next year through a bond issuance or bank debt transaction. The former option will prove challenging as capital markets remain closed for most Latin America corporates rated in the single B rating category. Fitch believes the shareholders' ability and willingness to support the company, as well as a valuable unencumbered land-bank, should help facilitate a secured debt transaction.

Fitch views positively the recent appointment of the new CEO, Mr. Manuel Salazar, who will help strengthen corporate governance and the refinancing process. The former CEO, Mr. Samuel Dyer, will support him during transition and will continue as Chairman of Camposol's Board of Directors.

Fitch currently rates Camposol Holding Ltd. and Camposol S.A. as follows:

Camposol Holding Ltd.
--Long-term foreign currency IDR 'B-';
--Long-term local currency IDR 'B-'.

Camposol S.A.
--Long-term foreign currency IDR 'B-';
--Long-term local currency IDR 'B-';
--Senior unsecured notes 'B-/RR4'.

The Rating Outlook is Stable.