Fitch affirms Rede Energia

Fitch Ratings said it affirmed Rede Energia SA's foreign- and local-currency issuer default ratings at B-, long-term national scale rating at B(bra), $575 million perpetual notes at B-/RR4 and R$370 million debentures due 2015 at B(bra).

The agency also affirmed subsidiaries Centrais Eletricas do Para and Centrais Eletricas Matogrossenses SA's foreign- and local-currency issuer default ratings at B, long-term national scale rating at BBB (bra) and $100 million note units due 2012 at B/RR4.

The outlook is stable.

The agency said the ratings reflect the group's high refinancing risk due to high leverage, large short-term debt and limited liquidity; its poor operating performance; and its need for operational performance improvement, especially the reduction of Celpa's energy losses.

Fitch said it incorporated into the ratings the improved business environment for Brazilian electric power companies as the sector has shown resilience during economic downturns and the perception of lower exposure to regulatory risk.

For the last 12 months ended Sept. 30, the total adjusted debt-to-EBITDA ratio was 6.2 times.

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