Fitch Ratings has assigned a National Long-Term Rating of 'A+ (bra)' to the eighth issuance of simple, unsecured and nonconvertible debentures of Sul America S.A. (Sasa).
The transaction totals BRL700 million and will be carried out in two series, with BRL233 million in the first series and BRL467 million in the second series, maturing in February 2024 and 2026, respectively.
The Final National Short-Term Rating is in line with the Expected National Long-Term Rating that Fitch assigned to the proposed debentures on Jan. 18, 2021 (see 'Fitch Assigns Expected Ratings to Sul America's Eighth Debenture Issuance' on www.fitchratings.com).
KEY RATING DRIVERS
The Final National Long-Term Rating of the eighth debenture issuance is mapped from Sasa's National Long-Term Rating of 'AA-(bra)', per Fitch's rating criteria.
The eighth issue of debentures will total BRL700 million, to be realized in two tranches. The first tranche will expire in three years and the second in five years. Coupons will be paid semiannually. The principal of the first tranche will be paid in full in three years, while the principal of the second tranche will be paid in the fourth and fifth years from the issuance date in two equal installments. The coupon rates will be determined at the time of issuance but will not exceed the interbank deposit rate (CDI) + 1.70% for the first tranche and the CDI + 2.05% for the second tranche.
The proceeds will be used to strengthen the company's liquidity levels, as well as for general corporate purposes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Sasa's Issuer Default Ratings (IDRs) and debt ratings would be positively affected by improvement in Brazil's industry profile and operating environment driven by a decline in country risk and stronger financial market development, which in turn would lead to improvement in Fitch's assessment of Sasa's investment and asset risk, along with its capitalization and leverage credit factors.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Sasa's IDRs and debt ratings would be negatively affected by deterioration in Brazil's industry profile and operating environment, which would lead to a worsening in Fitch's assessment of Sasa's investment and asset risk, along with its capitalization and leverage credit factors. Sasa's ratings may also be affected by eventual significant deterioration and a prolonged period of profitability and leverage, as measured by a return on average equity (ROAE) below 8% and a financial leverage ratio (debt/(equity capital + debt)) above 31%, in addition to a significant adverse change in Fitch's assumptions regarding the impact of the coronavirus pandemic on the sector and the company. Sasa's National Ratings may be affected by a change in Fitch's perception of the company's creditworthiness with respect to other Brazilian entities rated on the national scale.
DATE OF RELEVANT COMMITTEE
13 January 2021
RATING ACTIONS
ENTITY/DEBT RATING PRIOR
Sul America S.A.
senior unsecured
Natl LT A+(bra) New Rating A+(EXP)(bra)
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
SUL AMERGDS 
