Fitch: Itaipu Binacional BBB

Fitch Ratings said it assigned long-term foreign- and local-currency issuer default ratings of BBB and long-term national rating of AAA(bra) to Itaipu Binacional.

The outlook is stable.

Itaipu’s ratings reflect its strong credit profile linkage with the Federative Republic of Brazil, Fitch said.

Brazil has been historically responsible for the acquisition of 90% to 94% of the energy produced by Itaipu and guarantees, through the National Treasury, 99.2% of the company’s debt, the agency said.

These characteristics reduce Itaipu’s exposure to the weaker sovereign risk of the Federative Republic of Paraguay, Fitch said.

The ratings also incorporate Itaipu’s adequate liquidity position and cash flow predictability, resulting from the Itaipu Treaty signed between Brazil and Paraguay, the agency said.

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