Fitch: OAS notes BBB(bra)

Fitch Ratings said it assigned a long-term national rating of BBB(bra) to OAS SA's proposed fifth debenture issuance of up to R$300 million.

The issuance will have an 18-month grace period and final maturity in May 2015.

It will be guaranteed by Construtora OAS Ltda.

The proceeds from the issuance should be used to lengthen the issuer's short-term debt.

Fitch also said it affirmed OAS's long-term foreign-currency issuer default rating at B, long-term local-currency issuer default rating at B, long-term national rating at BBB(bra), long-term national rating for the second debenture issuance in the amount of R$200 million due in 2013 at BBB(bra), long-term national rating for the third debenture issuance in the amount of R$300 million due in 2016 at BBB(bra) and long-term national rating for the fourth debenture issuance in the amount of R$250 million due in 2027 at BBB(bra).

The agency also said it affirmed Construtora OAS's long-term foreign-currency issuer default rating at B, long-term local-currency issuer default rating at B and long-term national rating at BBB(bra).

OAS Empreendimentos SA's long-term national rating also was affirmed at BB+(bra) and long-term national rating for the second debenture issuance, in the amount of R$60 million due in 2014 also was affirmed at BBB(bra).

The outlook is stable.

The ratings reflect the maintenance of satisfactory liquidity position of the group and the recovery in 2011 of Construtora OAS's operating margins, Fitch said.

The ratings remain limited by the group's high leverage on a consolidated basis due to increased debt to support its aggressive expansion strategy, despite a moderate improvement in operating results, the agency said.

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