Moody's downgrades Invepar debentures

Moody's America Latina said it downgraded the ratings of the R$450 million of senior debentures issued by Investimentos e Participações em Infraestrutura SA (Invepar) and guaranteed by its operating subsidiary Linha Amarela SA to Ba3 from Ba2 on the global scale and to A2.br from A1.br on the Brazilian national scale.

This rating action concludes the review for possible downgrade that commenced on March 2. The outlook remains negative.

The downgrade reflects Moody's perception of increased credit risk at the subsidiary guarantor Lamsa as a result of its additional investment requirements through 2012, the agency said.

Lamsa has strong credit metrics for the rating category and a track record of improving operating performance that is relatively long, dating back to 1998, the agency added. The company, however, has recently committed to investing R$258 million in improvements for road traffic.

Invepar's Ba3 and A2.br corporate family ratings reflect the inherently stable and predictable cash flow of its current operating subsidiaries, Moody's said. The ratings, however, are pressured by the significant amount of debt due in the near term and the group's high leverage vis-à-vis its operating cash generation when compared to that of its local peers.

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