Moody’s lowers Brazilian water and electric utilities

Moody’s America Latina said it took the following actions on its portfolio of water and electric utilities as a result of the downgrade of Brazil's issuer and bond ratings:

• Companhia Energetica de Minas Gerais (Cemig): Issuer ratings downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade; outlook changed to negative;

• Cemig Distribuicao SA: Issuer ratings downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade; outlook changed to negative;

• Cemig Geracao e Transmissao SA: Corporate family ratings downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade; outlook changed to negative;

• Companhia de Saneamento do Parana – Sanepar: Issuer ratings downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade; R$600 million senior debentures due in 2020 downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade; outlooks changed to stable;

• Companhia de Saneamento de Minas Gerais SA – Copasa: Corporate family ratings downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade, senior unsecured Brazilian debentures downgraded to Ba3/A2.br from Ba1/Aa2.br, under review for downgrade, outlook changed to negative; and

• Companhia de Saneamento Basico do Estado de Sao Paulo – Sabesp: Corporate family ratings downgraded to Ba from Ba1 on the global scale and affirmed at Aa2.br on the national scale.

These actions reflect Moody's view that the recent sovereign and sub-sovereign rating actions, as a result of deteriorating economic and fiscal perspectives together with worsening governability and policy paralysis, will negatively affect the credit quality of the companies.

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