Fitch: Rede D'Or view to positive

Fitch Ratings said it affirmed Rede D'Or Sao Luiz SA's foreign and local currency long-term issuer default ratings at BB+ and its national scale long-term rating at AA+(bra).

The outlook for the local currency issuer default rating and national scale ratings was revised to positive from stable. The outlook for the foreign currency rating remains negative, and follows Fitch's negative outlook for the Brazilian sovereign.

Fitch said the positive outlook for the local currency and national scale ratings reflects its expectation that Rede D'Or's credit profile will continue to strengthen over the medium term as its profitability and cash flow generation continues to increase. This is expected to allow further deleveraging despite the company's aggressive growth strategy.

Fitch's base case scenario incorporates that the company will have flexibility to spend around R$2 billion in acquisitions during the next three years while managing to maintain net adjusted debt to EBITDAR ratios below 2 times.

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