Fitch revises Light view to stable

Fitch Ratings said it revised the outlooks for Light SA and its wholly owned subsidiaries Light Servicos de Eletricidade SA and Light Energia SA to stable from negative.

Fitch also affirmed the companies’ foreign currency and local currency long-term issuer default ratings at BB-. Concurrently, Fitch lifted the three entities’ long-term national scale rating to AA-(bra) from A+(bra).

The outlook revisions follow Light’s sale of common shares that will improve its capital structure, reducing its high net leverage to 3.5x in 2021 and 3x in 2022, the agency said.

“The stable outlook also incorporates Fitch’s expectation that Light will use a considerable part of the proceeds to reduce total debt. On Jan. 19, 2021, Light priced its primary and secondary distribution of common shares, in the amount of R$2.8 billion, that will be settled on Jan. 22, 2021. Light will receive R$1.4 billion from the primary offering, which will bring the consolidated credit metrics in line with the current BB- IDRs. The upgrade on the national scale ratings reflects Light group’s strengthening of its credit profile within the BB- IDR level,” the agency said in a press release.

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