S&P lifts RBS Comunicacoes

Standard & Poor's said it raised the long-term corporate credit rating on RBS Comunicacoes SA e empresas combinadas to BB from BB-.

The outlook is stable.

S&P said the upgrade reflects the strong fundamentals for advertising growth in Brazil and significantly improved credit metrics on positive market conditions in the media industry as well as the company's consistent use of discretionary cash flow to reduce net leverage in the past three years.

The rating reflects risks associated with the group's operations in the cyclical media industry and the dependence of its revenue on a rather volatile advertising environment, the agency said.

It also reflects the challenges in maintaining cash flow margins as competition for talent and events remains strong and inflation picks up overall, S&P said.

These factors are partially offset by the group's dominant share of audience and advertising in its service area, the benefits of distributing high-quality content and the commitment of shareholders and management to a more moderate financial profile, according to the agency.

The issuer's total debt-to-EBITDA ratio is expected to remain at less than 2 times, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.