Fitch upgrades CNO

Fitch Ratings said it upgraded Construtora Norberto Odebretch SA's long-term foreign- and local-currency issuer default ratings to BBB- from BB+ and its long-term national scale rating to AA+(bra) from AA(bra).

The agency also assigned a BBB- foreign-currency issuer default rating to Odebrecht Finance Ltd. and upgraded its $400 million senior guaranteed notes due Oct. 18, 2017, $200 million senior guaranteed notes due April 9, 2014, $500 million senior guaranteed notes due April 21, 2020 and $500 million perpetual notes to BBB- from BB+.

The outlooks for both companies are stable.

The agency said the upgrade is due to the growth of the company's cash flow and backlog of projects and considers the decreased financial exposure of CNO to other businesses of Odebrecht Group, as it has made a strategic decision to not provide new guarantees of sister companies.

The ratings reflect CNO's conservative financial profile, its leading position in the engineering and construction sector in Latin America and an expectation that it will continue to maintain a conservative capital structure as it develops its projects, Fitch said.

For the last 12 months ended June 30, the total adjusted debt-to-EBITDA ratio was 2.2 times.

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