Moody's affirms Cemig

Moody's America Latina Ltda. affirmed the Baa2.br rating on its Brazil national scale, the B1 rating on its global local currency scale and the stable rating outlook on senior unsecured obligations of Companhia Energetica de Minas Gerais (Cemig).

Moody's said Cemig's ratings are principally constrained by the B3 rating of the state of Minas Gerais, the company's controlling shareholder, which reflects the state's heavy, growing debt burden and a structural fiscal imbalance.

Moody's said it observes that there is no clear ring-fencing of Cemig's cash flows from its controlling shareholder, thus leaving the company exposed to the risk of a cash drain in a scenario under which the state experiences a serious fiscal crisis.

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