Fitch gives Eletropaulo debt AA-(bra)

Fitch Ratings said it assigned a national long-term rating of AA-(bra) to Eletropaulo Metropolitana Eletricidade de Sao Paulo SA’s proposed 20th debenture issuance up to the amount of R$700 million and due in 2021.

The proposed issuance is guaranteed by a pledge of receivables collections. The funds raised will be used for the rescheduling of the company's debt maturities and working capital reinforcement, if balance is available.

Fitch currently rates Eletropaulo's long-term foreign and local currency issuer default ratings BB and long-term national scale rating AA-(bra).

The outlook for the corporate ratings is stable.

Fitch said the ratings reflect Eletropaulo's moderate leverage, strong liquidity position and lengthened debt maturity profile. The company benefits from its business risk profile, in view of its exclusive rights to distribute electricity within its concession area in the Metropolitan Region of Greater Sao Paulo.

After a two-year reduction in energy demand in Eletropaulo's concession area, which resulted in a cumulative decrease of about 8%, the agency said it expects the consumption to resume growth in 2017, with positive impact on its operational cash flow generation.

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