S&P gives Eletrobras notes BB-

Standard & Poor's said it assigned its BB- rating to Eletrobras - Centrais Eletricas Brasileiras SA's forthcoming $300 million unsecured and unsubordinated notes due in 2015 while the global scale corporate credit ratings at BB- foreign currency and BB local currency were also affirmed.

The outlook is positive.

S&P said Eletrobras' ratings are linked to the credit quality of the Federative Republic of Brazil (sovereign ratings foreign currency BB-/positive and local currency BB/positive). The company is majority owned by the government (58.4%) and the agency said it believes that the government has strong incentives to support Eletrobras in case of need given its strategic role in the financing of the electric power industry in Brazil and in managing federal assets in generation, transmission and distribution.

The company is also exposed to the evolving regulatory environment in Brazil, which can affect the credit quality of its loan portfolio, to the performance of its subsidiaries, some of which might require financial support from Eletrobras and strong influence of the government on its strategic planning, the agency added.

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