Fitch rates BR Malls notes BB

Fitch Ratings said it assigned a BB rating to BR Malls International Finance Ltd.'s proposed $200 million of perpetual notes and affirmed its foreign-currency issuer default rating and $175 million of perpetual notes at BB.

The agency also affirmed parent company BR Malls Participacoes SA's foreign- and local-currency issuer default ratings at BB, long-term national scale rating at AA-(bra) and R$320 million local debentures, first and second tranches due in 2014 and 2016, respectively, at AA-(bra).

The outlook is stable.

Proceeds from the proposed notes would be used to fund the company's capex plan, to refinance existing debt and for general corporate purposes.

The agency said the ratings reflect BR Malls' dominant business position as the largest Brazilian shopping center operator, stable and predictable cash flow generation, Brazil's positive economic environment, geographical and property revenue base diversification and low working capital requirements.

BR Malls has an aggressive growth strategy, Fitch said, and the potential affects of delays of turning around recently acquired assets and/or leasing new developments add to risk. The agency said the ratings also incorporate the company's recent acquisitions, which have weakened its capital structure, liquidity and leverage.

The debt-to-EBITDA ratio was 4.58 times as of Sept. 30.

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