Fitch cuts Cielo

Fitch Ratings said it downgraded Cielo SA’s foreign and local currency issuer default ratings to BB from BB+ and affirmed its long-term national scale rating at AAA(bra). Fitch also downgraded the senior unsecured notes for Cielo’s wholly owned subsidiary, Cielo USA Inc., to BB from BB+.

“The rating downgrade reflects the negative impact on the company’s cash flow generation capacity of increased competition in the payments industry in Brazil. Industry and business risks have significantly changed in the past few years, evidencing the lower resilience of Cielo’s business model,” said Fitch in a press release.

The outlook is stable.

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