S&P boosts Eletropaulo bonds

Standard & Poor's said it raised the ratings on Eletropaulo Metropolitana Eletricidade de São Paulo SA and its Brazilian real 474 million senior unsecured and unsubordinated euro bonds to BB- from B+.

On the Brazil national-scale, the brBBB+ corporate credit rating was raised to brA-, S&P said.

The ratings have been removed from CreditWatch with positive implications, where they had been placed on Sept. 22, when Eletropaulo obtained an extension on its pension fund obligations and after a full deleveraging occurred at its holding company, Brasiliana Energia SA, the agency added.

The outlook is stable.

S&P added that the rating action reflects Eletropaulo's better debt profile due to the pension fund extension agreement that will reduce debt amortizations of some BrR650 million through 2008, as well as the reduced pressure to upstream cash to its holding company after Brasiliana's debt prepayment with Banco Nacional de Desenvolvimento Economico e Social.

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