Moody's rates Brasil Telecom

Moody's America Latina Ltda. said it assigned a Brazil national scale rating of Aa1.br and a Baa3 global local currency scale rating to the proposed real 500 million debenture issuance of Brasil Telecom SA.

The outlook is stable.

Moody's said the ratings reflect Brasil Telecom's relatively strong financial profile and its dominant market position within its service territory. However, the ratings also recognize the challenges that lie ahead for the company including the prospect for increasing competition, the likelihood for less profitable customer growth, and the uncertainty created by company's shareholder dispute.

In addition, the ratings reflect the risk of acquisitions in the near- to mid-term, which is clearly one of the company's strategic options under consideration.

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