Moody's ups Espirito Santo, rates notes Ba3

Moody's Investors Service said it upgraded to Ba3 from B2 the rating of Espirito Santo Centrais Eletricas' $114 million senior unsecured notes due in July 2007.

Concurrently, Moody's America Latina said it assigned a Ba3 global local currency rating and an A3.br national scale rating to Escelsa's proposed R$200 million senior unsecured debentures due 2011.

Proceeds from the debentures issuance will be used to refinance existing debt, thereby lengthening the company's maturity profile, the agency said.

The outlook for Escelsa is stable.

The upgrade to Ba3 from B2 reflects a substantial decrease in balance sheet leverage and improvement in margins that follows regulatory adjustments in rates, the agency said.

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