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Fitch assigns Brasil Telecom, notes BBB
Fitch Ratings said it assigned a BBB foreign-currency issuer default rating to Brasil Telecom SA and its proposed 1 billion Brazilian real of senior unsecured notes due 2016.
The proceeds will be used for general corporate uses, capital expenditures and refinancing needs, Fitch said.
Fitch said the ratings of Tele Norte Leste Participacoes SA, Telemar Norte Leste SA and Brasil Telecom are equalized and viewed on a consolidated basis as the linkage between subsidiaries is considered strong.
These companies have operational and strategic ties and historically there have been cross defaults and debt guarantees from the parent, the agency said.
The ratings incorporate its strong market position, business scale, diverse service platforms, moderate regulatory risk, solid cash flow generation and a manageable debt maturity profile, Fitch said.
The ratings are tempered by an intense competitive environment that have resulted in modest operating results and gross leverage levels, which are somewhat high when compared to its Latin-American peers, the agency said.
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