S&P downgrades Brazil companies

By E. Janene Geiss

Philadelphia, Feb. 18 – Standard & Poor's said it took several rating actions on Brazilian corporations following the downgrade of the sovereign’s ratings.

Brazil’s long-term foreign-currency issuer credit rating was downgraded to BB from BB+, along with its local-currency ratings to BB and B from BBB- and A-3 and its national scale rating to brAA- from brAAA.

Brazil's tightening credit conditions and lower credit quality pressure the ratings of most of its domestic companies, S&P said.

These companies therefore are affected in various ways depending on their business configuration and financial strengths, the agency said.

The following companies with ratings capped at the sovereign level were downgraded to BB with a negative outlook: Ampla Energia e Servicos SA; Bandeirante Energia SA; Espirito Santo Centrais Eletricas SA; Companhia de Gas de Sao Paulo Comgas; Companhia de Eletricidade do Estado da Bahia – Coelba; Companhia Energetica do Ceara Coelce; Companhia Energetica de Pernambuco – Celpe; Companhia Energetica do Rio Grande do Norte – Cosern; Companhia Paulista de Forca e Luz; Companhia Piratininga de Forca e Luz; CPFL Energia SA; Elektro Eletricidade e Servicos SA; Eletropaulo Metropolitana Eletricidade de Sao Paulo SA; Energisa SA; Energisa Paraiba – Distribuidora de Energia SA; Energisa Sergipe – Distribuidora de Energia SA; Itapebi Geracao de Energia SA; MRS Logistica SA; NC Energia SA; Neoenegia SA; RBS TV Comunicacoes SA e empresas combinadas; Rio Grande Energia SA; Termopernambuco SA; and Transmissora Alianca de Energia Eletrica SA.

The following companies also were downgraded, but due to superior financial strength, their ratings are higher than the sovereign ratings: Globo Comunicacao e Participacoes SA was lowered to BBB-; Localiza Rent a Car SA was lowered to BB+; Lojas Renner SA’s outlook was revised to negative; Multiplan Empreendimentos Imobiliarios SA was lowered to BB+; Odebrecht Engenharia e Construcao was lowered to BB+; Telefonica Brasil SA’s outlook was revised to negative; Ultrapar Participacoes SA’s rating was lowered BB+; and Votorantim SA’s and Votorantim Cimentos SA’s rating were lowered BB+.

Ambev – Companhia de Bebidas das Americas also was downgraded to BBB+.

The following government-related entities also were downgraded: Eletrobras – Centrais Eletricas Brasileiras SA was lowered to BB; and Petroleo Brasileiro SA – Petrobras was lowered to B+.

The following ratings were placed on CreditWatch negative because of a 50% chance of a downgrade: Andrade Gutierrez Participacoes SA; Companhia Brasileira de Distribuicao; Embraer SA; Iguatemi Empresa de Shopping Centers; and Natura Cosmeticos SA.

The agency said it will continue to monitor the overall credit-quality evolution for the corporate sector in the country in light of continuing challenging economic and political situation, higher inflation, exchange-rate volatility, higher interest rates, reduced debt market access and low commodity prices.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.