S&P: RBS Participacoes stable

Standard & Poor's said it changed its outlook on the ratings assigned to RBS Participações SA to stable from negative and affirmed its B- local and foreign currency corporate credit ratings on RBS. The rating on the company's medium-term notes due 2007 was also affirmed at B-.

"The change in outlook reflects our expectation that the group will manage to sustain the positive operating results achieved in past quarters, benefiting from stronger advertising spending in Brazil and from cost savings it has been implementing since last year," said S&P credit analyst Milena Zaniboni.

Going forward, S&P said the group is expected to generate positive free cash flow, though not enough to cover all maturities in the next years, which, together with the completion of the exchange offer on 53% of the company's MTNs, have reduced refinancing risks in 2007.

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