Moody’s rates Bandeirante CFR, debt Ba2/Aa2.br

Moody's America Latina said it assigned a Ba2 global scale rating and an Aa2.br national rating to the proposed R$150 million five-year senior unsecured debentures to be issued by Bandeirante Energia SA.

At the same time, the agency assigned a Ba2/Aa2.br corporate family rating to Bandeirante and withdrew its Ba2/Aa2.br issuer ratings.

The outlook is negative.

The seventh debentures' issuance is part of Bandeirante's liability management strategy and proceeds will be used to refinance existing debt obligations due in 2017 along with other working capital needs.

Moody’s said the Ba2 corporate family rating reflects: (a) The relatively stable and predictable nature of its cash flows derived from a distribution concession that is valid through October 2028; (b) historically strong credit metrics for the rating category, measured by the three-year average CFO pre-W/C to debt ratio of 49% and interest coverage ratio of 4.6 times as from 2014 through 2016; and (c) an evolving regulatory environment with recent evidence of supportive aimed to provide timely relief to the financial risk of electricity distribution companies.

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