Moody's upgrades Centrais Elctricas

Moody's Investors Service said it upgraded the corporate family ratings assigned to Centrais Eletricas de Santa Catarina SA to Ba2 from Ba3 on the global scale and to Aa3.br from A1.br on Brazil's national scale.

Moody's also said it upgraded the issuer rating on Celesc Distribuiçao SA to Ba2/Aa3.br from Ba3/A1.br.

The outlook also was changed to stable from positive.

The upgrades were prompted by progress made by the company to secure long-term financing at lower costs and resolution of disputes over regulatory liabilities, contributing to an expectation that consolidated credit metrics will remain well positioned within a higher rating category, Moody's said.

The ratings reflect a moderate risk profile, primarily driven by its regulated distribution business, which accounts for more than 80% of consolidated cash generation, the agency said.

The ratings also consider an expectation of continuity in the improving fundamentals of the service area, which has been growing above the national average, Moody's said.

Celesc's global scale rating is constrained by Brazil's government bond rating, given the highly regulated nature of the energy sector and exposure to the same operating environment as the sovereign, the agency added.

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