S&P ups Localiza

Standard & Poor's said it raised the global-scale ratings on Localiza Rent a Car SA to BB+ from BB and national scale ratings to brAA from brAA-.

The agency also said it will upgrade the company's R$200 million debentures maturing in 2014 to brAA from brAA-.

The outlook is stable.

The action reflects an expectation that Localiza will maintain moderate financial policies even while building up its fleet to benefit from high growth in the Brazilian car rental industry in the next few years, S&P said.

The company has demonstrated consistent financial performance through cycles, attesting to its ability to benefit from its leading market position and brand name to effectively offset the industry's volatility, the agency said.

But the small and fragmented car rental industry reflects the still-low use of car rentals in Brazil, which is viewed as a limitation to a stronger business profile in the midterm, S&P said.

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