Moody's may lift 10 Brazil electric utilities

Moody's Investors Service said it upgraded the supportiveness of Brazil's regulatory environment (SRE) to 3 from 4.

In accordance with Moody's rating methodology, the SRE category 4, the least supportive environment, is characterized by a regulatory framework that is still under development, is unclear or undergoing considerable change.

Moody's said it now considers that the Brazilian regulatory framework should be classified in SRE category 3, primarily due to the fact that regulated utilities can recover costs and maintain adequate returns, even after going through a period of electricity rationing and high inflation.

In light of the upgrade of the supportiveness of Brazil's regulatory environment, Moody's said it is also placing the ratings of 10 electric utilities under review for possible upgrade as follows:

• Companhia Energetica de Minas Gerais: corporate family ratings: Ba2 (global local currency rating) and Aa3.br (national-scale rating);

• Cemig Distribuição SA: senior unsecured issuer ratings: Ba2 and Aa3.br;

• Cemig Geração Transmissão SA: senior unsecured issuer ratings: Ba2 and Aa3.br;

• EDP -- Energias do Brasil SA: corporate family ratings: Ba2 and Aa3.br;

• Bandeirante Energia SA: senior unsecured issuer ratings: Ba2 and Aa3.br;

• Espírito Santo Centrais Elétricas: senior unsecured issuer ratings: Ba2 and Aa3.br and unsecured subordinated ratings: Ba3 and A2.br;

• Companhia Paranaense de Energia: corporate family ratings: Ba2 and Aa2.br and senior secured ratings: Ba1 and Aa1.br;

• Rio Grande Energia SA: senior unsecured ratings: Ba2 and Aa2.br;

• Duke Energy International, Geração Paranapanema SA: corporate family ratings: Ba2 and A1.br; and

Energisa SA: corporate family ratings: Ba3 and A3.br and guaranteed notes units issued by Energisa Sergipe and Energisa Paraíba: rating Ba3.

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