Moody's upgrades Cemig

Moody's Investors Service said it raised the corporate family rating of Companhia Energetica de Minas Gerais - Cemig to Ba2 from Ba3. Concurrently, Moody's upgraded the global scale issuer ratings of Cemig Distribuicao SA (Cemig D) and Cemig Geracao e Transmissao SA (Cemig GT) to Ba2 from Ba3. The outlook was changed to stable from positive.

“The ratings' upgrade reflects the favorable operating track record and the substantial improvements in the group's financial policy and risk management over the past three years, following planned asset divestures and liability management initiatives,” Moody’s said in a press release.

As of March, the company reported a consolidated cash & cash equivalents position of about R$2.4 billion, compared to R$1.1 billion in debt maturities through March 2023. Liquidity available can cover all debt maturities over the next 24 months, Moody’s said.

“Cemig's reduced leverage is also a credit positive, because it will sustain the CFO pre-WC/debt ratio between 28% - 30% and interest coverage between 3.5x-4x in the next 12 to 18 months, despite a prospective modest economic growth, high inflationary pressures and interest rates,” the agency said.

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