Fitch lowers Light

Fitch Ratings said it downgraded the local currency and foreign currency long-term issuer default ratings of Light SA and its wholly owned subsidiaries Light Servicos de Eletricidade SA (Light Sesa) and Light Energia SA to C from CC.

The agency also downgraded the long-term national scale ratings of these entities to C(bra) from CC(bra).

Fitch downgraded the foreign currency and local currency debt instruments to C/RR4 from CC/RR4 and to C(bra) from CC(bra), respectively.

“The downgrade to C follows Light's announcement that it has obtained an ‘injunction relief’ from Rio de Janeiro's court, establishing the suspension of enforceability of all obligations related to financial instruments and the effects of any declarations of early maturity and/or accelerated amortization,” the agency said in a news release.

“The injunction also approves the commencement of collective mediation proceedings.”

If Light formally announces a restructuring plan, Fitch said it will downgrade the ratings to RD to reflect a restricted default.

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