S&P revises Cemig view to positive

S&P said it revised the outlook to positive from stable on Companhia Energetica de Minas Gerais-Cemig and on its operating subsidiaries, Cemig Distribuicao SA and Cemig Geracao e Transmissao SA. The agency also affirmed the B global scale and brA+ Brazil national scale ratings on all three entities.

Concurrently, S&P affirmed the B ratings on Cemig-GT’s 1.5 billion bonds due 2024.

“The rating action on Cemig and its subsidiaries reflect the recent improvement in credit metrics – debt to EBITDA of 4.2x and FFO to debt of 10% as of March 2020 – and we expect the group to maintain these metrics despite the pandemic-induced economic downturn. Operating performance improved particularly at Cemig’s distribution business since the last rate approval in 2018 and the recent favorable decision in a tax dispute, which allowed the group to access about R$1.4 billion in judicial deposits,” S&P said in a press release.

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