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Technical Side
Moody's Upgrades Aracruz to Baa2
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Sao Paulo, Brazil, 18 April 2007 -- Moody's Investors Service has upgraded the local currency issuer ratings of Aracruz Celulose S.A. (NYSE: ARA) to Baa2, from Baa3, on its global scale and to Aaa.br, from Aa1.br, on its Brazilian national scale.

According to the press release issued today by the rating agency, "The upgrade of the global local currency issuer rating results from the improved leverage metrics of Aracruz as measured by Total Adjusted Gross Debt to EBITDA of below 2.0x since early 2006. This improvement reflects the additional cash flow from Veracel rather than balance-sheet de-leveraging. Veracel is a 50%-50% venture with Stora Enso for the production of 900,000 tons per year of bleached eucalyptus market pulp. In addition, Aracruz's global local currency rating benefits from its moderate potential to monetize part of timberland assets to reduce indebtedness."

It also says that, "Aracruz's ratings reflect the company's favorable production profile and high margins, that are supported by its scale, self-sufficiency in electricity and fiber, and its efficient logistics."

Aracruz Celulose S.A., with operations in the Brazilian states of Espírito Santo, Bahia, Minas Gerais, and Rio Grande do Sul, is the world's largest producer of bleached eucalyptus kraft pulp. All of the high-quality hardwood pulp supplied by the company is produced exclusively from planted eucalyptus forests. The Aracruz pulp is used to manufacture a wide range of consumer and value-added products, including premium tissue and top quality printing and specialty papers.


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