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Fitch Upgrades Eletropaulo's Ratings to 'BB' & 'A+(bra)'; Outlook Stable.

Article Excerpt
RIO DE JANEIRO & CHICAGO -- Fitch Ratings has upgraded the ratings of Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. (Eletropaulo) as follows:

--Foreign currency Issuer Default Rating (IDR) to 'BB' from 'BB-';

--Local currency IDR to 'BB' from 'BB-';

--Long-term national scale rating to 'A+(bra)' from 'A(bra)';

--Senior unsecured notes due 2010 to 'BB' from 'BB-';

--Ninth issuance of debentures due 2018 to 'A+(bra)' from 'A(bra)';

--10th issuance of debentures due 2013 to 'A+(bra)' from 'A(bra)';

--11th issuance of debentures due 2018 to 'A+(bra)' from 'A(bra)';

--Bank credit certificate (cedula de credito bancario - CCB) due 2015 to 'A+(bra)' from 'A(bra)'.

The Rating Outlook is Stable for the corporate ratings.

The upgrade reflects Eletropaulo's conservative financial profile, low business risk and an increasingly stable regulatory framework in Brazil that has matured over the last few years. Since 2005, Eletropaulo's credit metrics have strengthened mainly as a result of debt reduction. Going forward, the company's credit metrics are expected to remain in line with the newly assigned rating category, although they are expected to marginally deteriorate as a result of possible settlement of tax disputes with the Brazilian government, which...

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