Fitch ups Localiza Rent a Car, rates notes AAA(bra)

Fitch Ratings said it upgraded Localiza Rent a Car SA's foreign-currency issuer default rating to BBB from BBB-, local-currency issuer default rating to BBB from BBB-, long-term national scale rating to AAA(bra) from AA+(bra) and unsecured fifth and sixth debenture issuance to AAA(bra) from AA+(bra).

Fitch also assigned an AAA(bra) rating to Localiza's unsecured seventh debenture issuance due in 2021 in the amount of R$500 million.

The proceeds from the issuance will be used to refinance debt and to support working capital requirements, the agency said.

The outlook also was revised to stable from positive.

The upgrades reflect Localiza's proven ability to adjust its business model to consistently allow financial flexibility to withstand changes in the economic cycle while preserving its healthy capital structure and credit metrics, Fitch said.

The agency said it expects that Localiza's performance will weather the current environment of slower economic growth without damaging its consistent performance and credit metrics.

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