Moody's upgrades Bandeirante

Moody's America Latina said it upgraded Bandeirante Energia SA's senior unsecured corporate family rating to Ba2 from Ba3 on its global scale and to Aa3.br from A3.br on its Brazilian national scale.

The agency also assigned Ba2 global local-currency and Aa3.br Brazilian national scale senior unsecured issuer ratings to the company and upgraded its R$250 million senior unsecured local-currency debentures due 2011 to Ba2/Aa3.br from Ba3/A3.br.

This concludes the review for possible upgrade that began on April 13, and the outlook is stable.

The agency said the assignment of the senior unsecured issuer ratings to Bandeirante follows the assignment of Ba3/Aa3.br corporate family ratings to parent company EDP - Energias do Brasil SA.

The upgrade of Bandeirante's ratings reflects its overall improved debt protection metrics and liquidity position, including free cash flow to total adjusted debt of 67.4% at March 31. Moody's attributed the improvement to a combination of the gradual recovery in demand for energy in the company's concession territory and consistent tariff adjustments, as well as the replacement of short-term debt with long-term loans over the past several quarters.

The Ba2 global local-currency issuer rating balances Bandeirante's exclusively regulated power distribution activity under a long-term concession contract against uncertainties related to the Brazilian regulatory environment for power utilities, particularly with regard to potential interference from the federal government, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.