S&P applies brAA- to Sabesp debt

Standard & Poor's said it assigned its brAA- Brazil national scale rating on Companhia de Saneamento Basico do Estado de Sao Paulo – Sabesp’s (global scale: BB/stable/--; national scale: brAA-/stable/--) proposed four-year R$500 million debentures.

The company will use the proceeds to refinance debt maturing in the first quarter of 2016 and to replenish its cash position.

The agency also withdrew its 4 recovery ratings on Sabesp's senior unsecured debt.

S&P said the rating on the proposed issuance reflects the brAA- corporate credit rating on Sabesp, the largest water utility in Latin America. The company also benefits from its scale, scope and diversification due to its 364 exclusive contracts – the largest of which is a 30-year contract with the municipality of Sao Paulo – to provide water and sewage services to about 28.6 million customers (including the wholesale segment) in the state of Sao Paulo.

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