Fitch ups Telemar Norte

Fitch Ratings said it upgraded Tele Norte Leste Participacoes SA's local-currency issuer default rating to BBB from BBB-, foreign-currency issuer default rating to BBB from BBB- and national-scale rating to AAA(bra) from AA+(bra).

Fitch upgraded subsidiary Telemar Norte Leste SA's local-currency and foreign currency issuer default ratings to BBB from BBB-; national-scale rating to AAA(bra) from AA+(bra); $1.75 billion of senior notes due 2020, $750 million of senior notes due 2019 and €750 million of senior notes due 2017 to BBB from BBB- and R$2.25 billion fifth debenture issuance maturing 2015 and 2020 to AAA(bra) from AA+(bra).

Fitch also upgraded Brasil Telecom SA's local-currency issuer default rating to BBB from BBB-, national-scale rating to AAA(bra) from AA+(bra) and R$1.08 billion fifth debenture issuance due 2013 to AAA(bra) from AA+(bra).

The outlook was revised to stable from positive.

The upgrades reflect the solid progress made by the companies toward a long-term target of net debt-to-EBITDA ratio of 1.7 times, the agency said.

The ratings incorporate the strong market position, business scale, diverse service platforms, moderate regulatory risk, solid cash flow generation and a manageable debt maturity profile as well as an intense competitive environment that has resulted in modest operating results and gross leverage levels, the agency said.

For the 12 months ended Dec. 31, the total debt-to-EBITDA ratio was 2.9 times.

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