Fitch assigns Telemar Norte notes BBB-

Fitch Ratings said it assigned a BBB- rating to Telemar Norte Leste SA's proposed issuance of up to $750 million senior unsecured notes due 2020.

The proceeds will be used for refinancing needs, improving the debt maturity profile and general corporate uses. The company also may offer a voluntary exchange of its 2019 senior notes for the new 2020 notes, Fitch said.

Tele Norte Leste Participacoes SA, the parent company, has a local-currency issuer default rating of BBB-, foreign-currency issuer default rating of BBB- and national scale rating of AA+(bra).

Telemar Norte Leste has a local-currency issuer default rating of BBB-, foreign-currency issuer default rating of BBB-, national scale rating of AA+(bra), along with a BBB- rating on its $750 million senior notes due 2019, AA+(bra) rating on its R$2.6 billion fourth debenture issuance maturing 2011 and 2012 and an AA+(bra) rating on its R$2.25 billion fifth debenture issuance maturing 2015 and 2020.

Brasil Telecom SA has a local-currency issuer default rating of BBB-, national scale rating of AA+(bra) and R$1.08 billion fifth debenture issuance due 2013.

The outlook is positive.

The ratings reflect a view of the company's stronger competitive position after the acquisition of Brasil Telecom, diverse service offering and solid cash flow generation, Fitch said.

The agency said it expects the company should approach a net debt-to-EBITDA target of 1.7x by the end of 2012.

Solid progress by the company towards this target may lead to a one-notch upgrade, providing there are no material changes to the company's business and financial risk profile, Fitch added.

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