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Moody’s rates ETEP debt Baa3/Aa1.br
Moody's America Latina Ltd. said it assigned a Baa3 issuer rating on the global scale and an Aa1.br issuer rating on the national scale to Empresa Paraense de Transmissao de Energia SA (ETEP).
At the same time, the agency assigned Baa3 rating on the global scale and an Aa1.br rating on the national scale to six-year amortizing R$69 million senior unsecured debentures to be issued by ETEP in the local market.
The outlooks are stable.
The debentures will amortize in quarterly installments after a two-year grace period for the payment of principal and a six-month grace period for the payment of interest. A major financial covenant embedded in the debenture indenture defines the maximum debt level that ETEP can incur at R$235 million through August 2017 and 50% of this amount after that date, which includes the company's consolidated subsidiary debt.
Proceeds will be used for working capital purposes.
Moody’s said the Baa3 and Aa1.br issuer ratings reflect the company's stable and predictable cash flow. The cash flow is supported by long-term regulated concession agreement ETEP signed with the Federal Government to operate 323 kilometers of electricity transmission lines in the Brazilian northern state of Para, which expire in 2031.
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