Fitch rates Oi Brasil notes BB+

Fitch Ratings said it assigned an expected BB+ rating to Oi Brasil Holdings Cooperatief UA’s (Oi Netherlands) proposed issue of up to €750 million senior unsecured notes due 2021.

Oi Netherlands is a wholly-owned subsidiary of Oi SA and the notes will be fully guaranteed by Oi and will rank pari passu with Oi’s other senior unsecured debt obligation, Fitch said.

The proceeds will be used for Oi’s liability management, the agency said.

Holders of Oi’s certain existing notes, including its €600 million 5 5/8% notes due 2016; €500 million 4 3/8% notes due 2017; €250 million 5.242% notes due 2017; and €750 million 5 1/8% notes due 2017, will be eligible for an option to switch into the proposed notes or sell their position for cash, Fitch said.

The remaining portion of the proceeds will be used to prepay or refinance Oi’s other debt obligations, the agency said.

This transaction will help bolster Oi’s solid liquidity profile, Fitch said.

The ratings reflect the company’s fully integrated service lineup of fixed- and mobile-services, which enables convergent service offerings, the agency said.

The ratings also consider its extensive network coverage and its position as the largest fixed-telephony service provider in Brazil, Fitch added.

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