S&P affirms Saelpa

Standard & Poor's said it raised the foreign-currency corporate credit rating on Sociedade Anonima de Eletrificacao da Paraiba (Saelpa) to BB- from B+.

The outlook was revised to stable from positive.

S&P affirmed its B+ corporate credit rating on Empresa Energetica de Sergipe SA (Energipe) and the B+ rating on the company's $250 million notes units.

The outlook is positive.

According to S&P, the rating action reflects the expected positive effects on Saelpa's capital structure after its parent holding company, Energisa Group (unrated), used proceeds from generation asset sales to reduce debt and an improved profile stemming from the issuance of a series of capital market transactions.

The rating on Saelpa reflects weak operating statistics, including high outage duration and high outage frequency, a high level of energy losses and some exposure to currency risk, the agency said.

Mitigating these factors are improving cash flow protection measures, a compatible debt amortization schedule, high profitability, manageable level of receivables and an exclusive concession to distribute electricity in the state of Paraiba, S&P said.

In September, the company recorded a total debt-to-EBITDA ratio of 3.1 times.

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