Moody's: Embratel local currency issuer rating positive

Moody's America Latina said it changed the outlook to positive from stable for Embratel's B1 global local currency issuer rating and its Baa1.br Brazil national scale issuer rating.

The outlook for the B1 foreign currency rating on the company's $275 million in guaranteed senior unsecured notes remains stable, since this rating also incorporates currency convertibility risk implied by Brazil's ceiling for foreign currency bonds and notes of B1.

The improved outlook reflects Moody's America Latina's expectation that Embratel will be able to reduce its cost of debt and increase its financial flexibility as it refinances its short term obligations with senior unsecured debt, in addition to management's intention to use free cash flow for debt reduction.

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