Fitch rates Energipe, Saelpa notes BB-

Fitch Ratings said it has assigned a rating of BB- to the proposed $250 million 10-year bullet note units offering of Empresa Energetica de Sergipe SA (Energipe) and Sociedade Anonima de Eletrificacao da Paraiba (Saelpa).

The issuance will be split between notes to Energipe (two-thirds) and notes to Saelpa (one-third).

The note units and underlying senior notes of the two entities will be guaranteed by their holding company, Energisa SA.

Fitch said its rating reflects the combined credit quality of the issuers and their guarantor given the notes' cross-default provision and nondetachable characteristics.

The rating is supported by improving credit-protection measures at Energipe and Saelpa and, on a consolidated basis, at Companhia Forca e Luz Cataguazes-Leopoldina, which should continue to strengthen over the next year, supported by projected growth in operating income and cash flow, as well as the reduction in annual debt service following the proposed issuance, Fitch noted.

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