Moody's ups some Ipiranga notes to Ba1

Moody's Investors Service said it upgraded to Ba1 from Ba3 Companhia Brasileira de Petróleo Ipiranga's step-up senior unsecured notes due August 2008, concluding the review process that began on April 2.

The outlook is stable.

The action reflects Moody's view that the issuer will benefit from the ownership by Ultrapar Participacoes SA (Baa3/stable) to improve its operating margins and cash flow through more efficient cost control, more efficient working capital management and synergies, according to the agency.

The credit strength of Ultrapar also is likely to have a positive impact on Ipiranga's financial management, the agency noted.

The Ba1 rating considers Ipiranga's position as the second largest fuel distribution company in Brazil and strong brand recognition for its high quality products and services, Moody's said.

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