Fitch ups CESP

Fitch Ratings said it upgraded Companhia Energetica de Sao Paulo's long-term local-currency issuer default rating to BBB- from BB+, removed it from watch positive and assigned a negative outlook.

The upgrade mirrors a one-notch uplift from its stand-alone credit profile due to the linkage with controlling shareholder Auren, whose stronger credit profile benefits from greater asset diversification and solid financial profile, the agency said.

“The usage of the parent and subsidiary linkage rating criteria follows the conclusion of the corporate reorganization, in which Auren increased its stake on CESP to 100% from 40%, and received a capital injection of R$1.5 billion and participations in several generation assets from the Votorantim group,” Fitch said in a press release.

The agency also affirmed CESP's long-term foreign-currency IDR at BB with a negative outlook and the national scale rating AAA(bra) with a stable outlook on the company.

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