S&P lowers Cemig view to stable

S&P said it revised the outlook to stable from positive on the ratings on Companhia Energetica de Minas Gerais – Cemig and on its operating subsidiaries, Cemig Distribuicao SA (Cemig-D) and Cemig Geracao e Transmissao SA (Cemig-GT).

The agency also said it affirmed the B global scale and brA+ Brazil national scale ratings on all three entities.

The B stand-alone credit profile is unchanged.

The agency also said it affirmed the B rating on Cemig-GT's $1.5 billion bonds due 2024.

The ratings reflect an expectation that the group's de-leveraging will depend mostly on its ability to sell some assets, which is taking longer than expected, the agency said.

Although S&P said it still expects Cemig's credit metrics to improve gradually over the next few years following initiatives to improve operating efficiency, a substantial debt reduction would require the company to divest some of its assets.

The stable outlook reflects a view that Cemig will maintain funds from operations-to-debt of about 9% and debt-to-EBITDA close to 5.5x in the next 12 months, S&P said.

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