Fitch upgrades Sul America

Fitch Ratings said it upgraded Sul America SA's long-term local- and foreign-currency issuer default ratings to BB- from B+ and long-term national rating to AA-(bra) from A+(bra).

The outlook is stable.

The upgrades follow Fitch's revised global master insurance criteria and subsequent placement of the company's ratings under criteria observation in January, the agency explained.

The revised criteria include changes to the way Fitch said it captures country-related risks in ratings, moving away from the use of "top-down" sovereign constraints to defining how country risk is captured within each key credit factor under a "bottom-up" analysis.

Prior to that, Sul America's ratings were constrained by Brazil's sovereign ratings, the agency noted.

The company's ratings reflect its favorable business profile relative to that of other Brazilian insurers, very strong financial performance and earnings and adequate capitalization, Fitch said.

Those ratings factors are partially offset by the company's significant exposure to Brazilian government securities and other non-investment grade securities, as well as risks associated with operating in the Brazilian insurance market, the agency said.

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