Fitch upgrades Rumo

Fitch Ratings said it upgraded Rumo SA's long-term local-currency issuer default rating to BB+ from BB.

Fitch also said it upgraded Rumo's national long-term ratings and unsecured debentures ratings to AAA(bra) from AA(bra).

The outlook also was revised to stable from positive.

The long-term foreign-currency issuer default rating and Rumo's unsecured bonds due in 2024 and 2025 were affirmed at BB, along with Rumo Luxembourg Sarl's rating at BB.

The outlook remains stable.

The upgrades are supported by Rumo's consistent scale gains, which have resulted in solid operating margins expansion and boosted operating cash flow generation, Fitch said.

These factors led to a strong capital structure that, combined with the robust liquidity position and consistent access to long-term credit lines, positively prepared the company to face the challenges of financing the new cycle of important investments, while maintaining its robust financial profile, the agency said.

The ratings are supported by its solid business position as one of the largest railroad operators in Brazil, with competitive advantages compared with alternative transportation options, Fitch said.

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