Fitch rates Brasil Telecom debt AA+(bra)

Fitch Ratings said it assigned a Brazilian national scale rating of AA+(bra) to the R$1.08 billion fifth issuance of debt, being the fourth issuance made public, of Brasil Telecom SA.

Proceeds from the issuance are being used to refinance existing debt, including the only private debt issuance and partial amortizations of Banco Nacional de Desenvolvimento Economico e Social debt.

Fitch said the ratings are supported by continued solid financial performance, despite the launching of wireless services; expected improvement in operating results over the next few years as wireless operations generate positive EBITDA; strong market position in Region II, which provides strong free cash flow due to the nature of the fixed line business; broad product offering and manageable debt levels.

The ratings incorporate increased competition from wireless services, lower regulatory risk and the expectation that pending issues among controlling shareholders of Solpart will not affect the company's credit quality.

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