Fitch affirms ISA Capital

Fitch Ratings said it affirmed ISA Capital do Brasil SA's foreign- and local-currency issuer default ratings at BB+, national scale rating at AA-(bra) and $31.6 million of senior secured notes at BBB-. The outlook is stable.

ISA Capital do Brasil's ratings reflect the strong credit quality of CTEEP (AA+(bra)), its sole revenue source and only operating asset. The agency said CTEEP's strong credit quality is attributable to its monopoly position, its stable and predictable operating cash flow and its financially sound credit profile.

The ratings also reflect the noteholders' structural subordination to CTEEP's obligations as well as the company's concession renewal and refinancing risks, Fitch said.

The one-notch rating difference for ISA Capital's outstanding bonds reflects its enhanced recovery prospects due to the refinancing of the majority of its debt with subordinated, debt-like preferred equity, the agency said.

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