Moody’s might drop Light

Moody's Investors Service said it placed Light SA (Ba2/Aa3.br stable) and its wholly owned electricity distribution and generation subsidiaries Light Servicos de Eletricidade SA (Ba2/Aa3.br stable) and Light Energia SA (Ba2/Aa3.br, stable) under review for downgrade given a breach of covenants that was announced by the company on Aug. 13, immediately after the release of the second quarter 2015 financial results.

On Aug. 13, Light reported that in the second quarter it did not meet the financial covenants contained in the indentures of the outstanding debentures issued by Light Servicos and Light Energia. According to the indentures, debt acceleration can occur if the financial covenants are breached in two consecutive quarters, or on a non-consecutive basis over four quarters.

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