Fitch upgrades BR Malls

Fitch Ratings said it upgraded BR Malls Participacoes SA's foreign-currency issuer default rating to BB+ from BB, local-currency issuer default rating to BB+ from BB and the long-term national scale rating to AA(bra) from AA-(bra).

The agency also said it upgraded the company's R$320 million local debentures, first- and second-tranches due in 2014 and 2016, to AA(bra) from AA-(bra) and its R$400 million local debentures, first- and second-tranches due in 2017 and 2019, to AA (bra) from AA-(bra).

Fitch also said it upgraded BR Malls International Finance Ltd.'s foreign-currency issuer default rating to BB+ from BB, $175 million perpetual notes to BB+ from BB and $230 million perpetual notes to BB+ from BB.

The outlook is stable.

The upgrades are a result of the company's emergence as the largest shopping center operator in Brazil with 51 malls throughout the country, an increase from 34 during 2008, Fitch said. The revenue stream from these malls has resulted in stable and predictable cash flows, the agency said.

The company's consistent use of a balance of equity and debt to fund its organic and inorganic growth during the past five years has kept leverage levels low relative to the value of its assets.

The stable outlook reflects the expectation that BR Malls will continue to deliver positive operating results based upon its strong market position and the high quality of its assets, Fitch said.

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