Moody's rates Aguas de Itapema notes Ba2

Moody's Investors Service said it assigned first-time corporate family ratings of Ba3 on the global scale and A2.br on the national scale to Companhia Aguas de Itapema.

The outlook is stable.

Moody's also said it assigned Ba2 global scale and Aa3.br national scale ratings to Aguas de Itapema's second issuance of senior secured debentures in the amount ofR$100 million due 2027.

The proceeds will be used to redeem about R$25 million of existing debt that was used to fund the company's expansion plan, the agency said.

The ratings reflect the company's low leverage in the context of its predictable operating profile as an operator of a regulated concession for water and sewage treatment for the city of Itapema, Moody's said.

The ratings also consider its lower size and scale relative to peers in the regulated water utility sector, along with the seasonality inherent to the local economy given the importance of tourism in the summer, the agency said.

The company has exposure to political and social interference due to a recent change in regulator and pending tariff adjustment discussions, Moody's added.

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