SAO PAULO & NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken the following credit rating actions on Rede Energia S.A. (Rede Energia) and its subsidiaries Centrais Eletricas do Para S.A. (Celpa) and Centrais Eletricas Matogrossenses S.A. (Cemat):
Celpa
--Local and Foreign Currency Issuer Default (IDRs) downgraded to 'D' from 'B-';
--Long-term National Scale Rating downgraded to 'D' from 'BB+(bra)';
--USD250 million senior unsecured notes due in 2016 long-term International Rating downgraded to 'C'/RR4' from 'B-/RR4'.
Cemat
--Local and Foreign Currency IDRs rated 'B-' placed on Watch Negative';
--Long-term National Scale Rating 'BB+(bra)' placed on Watch Negative.
Rede Energia
-- Local and Foreign Currency IDRs rated 'CCC' placed on Watch Negative;
-- Long Term National Scale Rating rated 'CCC (bra)' placed on Watch Negative;
--USD575 million perpetual notes long-term International Rating 'CCC/RR4' placed on Watch Negative;
--BRL370 million debenture issuance due in 2015 'CCC(bra)' placed on Watch Negative.
The rating actions follow the announcement by Celpa that a request for bankruptcy protection was filed in Brazil. This announcement will likely result in a payment default for some or all of Celpa's debt and result in a protracted debt renegotiation. Further, the Celpa default will negatively affect the payment capacity of Rede as well as trigger cross default provisions in both Rede's and Cemat's outstanding debt. Rede's and Cemat's already tight liquidity will be further restricted.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug. 13, 2010);
--'National Ratings - Methodology Update' (Jan. 19, 2011).
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