S&P boosts Espírito Santo Centrais Elétricas

Standard & Poor's said it raised its corporate credit ratings on Espírito Santo Centrais Elétricas SA to BB- from B+.

The issue rating on the company's $113.8 million senior notes was also raised to BB- from B+, the agency said.

The outlook is stable.

S&P said that the ratings upgrade reflects the company's cash-generation improvement in 2006 onward, which is already evident in the first-quarter results of 2006 and which stems primarily from the significant debt reduction achieved in 2005 after its regulated deverticalization.

The ratings upgrade also incorporates the debt-profile enhancement to be achieved through the company's first debentures issue, which will pay off its short-term and more expensive debt and extend its debt-amortization profile, resulting in better financial flexibility that will allow the company to seek appropriate alternatives to refinancing its $113.8 million senior notes maturing in 2007, the agency added.

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