Fitch boosts Brasil Telecom

Fitch Ratings said it has taken the following rating actions for Brasil Telecom Participacoes SA: local currency issuer default rating upgraded to BBB from BBB- and national-scale rating affirmed at AA+(bra).

The outlook is stable.

Fitch said it also took the following actions on and Brasil Telecom SA: local currency issuer default rating upgraded to BBB from BBB-, national-scale rating affirmed at AA+(bra), R$1.08 billion debentures affirmed at AA+(bra) and $200 million political-risk insured (PRI) notes due 2014 upgraded to BBB from BBB-.

The outlook is stable.

According to the agency, the upgrade of Brasil Telecom Participacoes and Brasil Telecom ratings, collectively referred to as Brasil Telecom, reflect an improved financial profile, strong liquidity position, healthy cash flow generation, solid business position in Region II, southern and midwestern Brazil, and a diverse service offering portfolio.

The ratings are balanced against strong competition, moderate regulatory risk and the expectation that shareholder issues will not affect the company's credit quality, the agency said.

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