Fitch affirms Sabesp

Fitch Ratings said it affirmed Companhia de Saneamento Basico do Estado de Sao Paulo's (Sabesp) local-currency long-term issuer default rating at BB, foreign-currency long-term issuer default rating at BB, international long-term rating for the $140 million of notes at BB, international long-term rating for the $350 million of bonds at BB, national long-term rating at A+(bra) and long-term national rating for the ninth debenture issuance in the amount of R$220 million at A+(bra).

The outlook is stable.

Sabesp's ratings are based on the company's solid financial profile with adequate margins and robust cash flow from operations, the agency said. The ratings are also supported by Sabesp's almost monopolistic position in its business area, as well as its economies of scale as the largest basic sanitation utility company in the Americas by number of customers.

Sabesp's ratings are limited by the company's recurring need to roll over significant debt amounts, by the uncertainties regarding the review and tariff readjustment effective from September 2012 onwards and its aggressive investment program for the next few years, the agency added.

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