Moody's lifts Duke notes

Moody's America Latina Ltda. said it upgraded the global scale rating on Duke Energy International, Geracao Paranapanema SA's R$341 million debentures due 2013 and 2015 to Ba1 from Ba2 and the Brazilian national scale rating on the debentures to Aa2.br from Aa3.br. The corporate family rating was affirmed at Ba1 on the global scale rating and Aa2.br on the Brazilian national scale rating.

The outlook was changed to positive from stable.

The agency said the rating action was prompted by management's announcement that Duke issued R$500 million of amortizing six-year unsecured debentures, the proceeds of which were used to redeem R$441 million of more expensive secured debt owed to the federally owned holding company, Eletrobras, thereby eliminating any secured debt in the capital structure.

The positive outlook reflects Moody's expectation that the strong operating performance posted by Duke over the past three years will continue in the foreseeable future. The agency said the outlook factors in Duke's fulfillment of its contractual obligation to expand capacity by 15%.

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