S&P upgrades Brazilian issuers

S&P said it raised the ratings for a group of Brazilian issuers following its upgrade of Brazil’s sovereign rating to BB from BB-.

“These issuers include mostly regulated utilities and transportation companies, given their inherent exposure to the country's regulatory framework and one federal government-related entity (Petrobras). Also in this group are companies that we believe are more likely to experience a liquidity crunch in a hypothetical sovereign distress scenario,” S&P said in a press release.

The issuers are BRF SA, CESP-Companhia Energetica de Sao Paulo, Companhia de Saneamento Basico do Estado de Sao Paulo, Companhia Energetica do Rio Grande do Norte, Cosan SA, MRS Logistica SA, Petroleo Brasileiro S.A. and Rumo SA.

In the same action, S&P raised its ratings on Localiza Rent a Car SA to BBB- from BB+, MV24 Capital BV’s debt to BB+ from BB, Nexa Resources SA and its debt to BBB- from BB+, Raizen SA to BBB from BBB-, Ultrapar Participacoes SA to BBB- from BB+, Votorantim SA to BBB from BBB- and Votorantim Cimentos SA to BBB from BBB-.

“These entities are, in our opinion, more insulated from domestic issues either because they have a global footprint or are export-oriented, and demand for their products doesn't correlate with Brazil's economy or because they have very low leverage and sound liquidity, despite their exposure to the domestic economy.

“The upgrade of Votorantim triggers the same action on its subsidiaries, Votorantim Cimentos and Nexa Resources, because of our view of a strong likelihood of group support in a stress scenario given their respective subsidiary status” S&P added.

© 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.