Taesa Transmissora Aliança de Energia Eletrica S A : Fitch Ratings – Fitch revisa perspectivas de ratings de várias empresas brasileiras para estável

20/07/2022 14:09

Fitch Revises Outlooks for 31 Brazilian Corporates to Stable; Affirms Ratings

RATING ACTION COMMENTARY

Fitch Revises Outlooks for 31 Brazilian Corporates to Stable; Affrms Ratings

Mon 18 Jul, 2022 - 20:55 ET

Fitch Ratings - São Paulo - 18 Jul 2022: Fitch Ratings has revised the Rating Outlook for 31 Brazilian corporates to Stable from Negative following a similar revision to Brazil's Sovereign Rating Outlook. In addition, Fitch has affrmed the issuers' Long-Term Foreign Currency (FC) Issuer Default Ratings (IDRs) and Local Currency (LC) IDRs. A full list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

Outlook Stabilized: The Outlook revision to Stable from Negative for these issuers results from their exposure to Brazil's Country Ceiling or their direct linkage to the country's sovereign ratings. The Brazilian Sovereign's Outlook revision to Stable from Negative refects the better-than-expected evolution of public fnances amid successive shocks in recent years since Fitch assigned the Negative Outlook in May 2020. Last year, Brazil recorded its frst primary fscal surplus since 2013, highlighting revenue outperformance and the authorities' commitment to withdraw stimulus implemented during the pandemic.

https://www.fitchratings.com/research/corporate-finance/fitch-revises-outlooks-for-31-brazilian-corporates-to-stable-affirms-ratings-18-07-2022

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20/07/2022 14:09

Fitch Revises Outlooks for 31 Brazilian Corporates to Stable; Affirms Ratings

Growth Resilience in 2022: Economic activity has been more resilient than our earlier expectations. Fitch projects 1.4% growth in 2022, up from 0.5% previously, refecting a better-than-expected 1Q22 outturn, post-pandemicre-opening of lagging sectors, a solid job recovery, augmented social transfers and higher commodity prices. Fitch expects that the lagged impact of the signifcant monetary policy tightening and domestic election-related and global uncertainties should constrain growth going forward and into 2023, despite the resilience thus far. Downside risks persist to our 1% growth projection for 2023.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

--The Rating Outlook for Foreign Currency (FC) Issuer Default Ratings (IDRs) of issuers with FC IDRs of 'BB' and Local Currency (LC) IDRs of 'BB+' or higher would be revised to Positive from Stable if the Brazilian sovereign Rating Outlook was revised to Positive from Stable;

--The FC IDR of issuers with FC IDRs of 'BB' and LC IDRs of 'BB+' or higher would be upgraded to 'BB+' if the Country Ceiling was raised to 'BB+' from 'BB'.

--Please refer to the issuers' rating action commentary for positive rating sensitivities for their LC IDRs;

Factors that could, individually or collectively, lead to a negative rating action/downgrade:

--The FC IDRs would be negatively impacted by a revision of the Brazilian sovereigns Rating Outlook to Negative from Stable, or a lowering of the Country Ceiling to 'BB-' from 'BB';

--The LC IDRs could be negatively impacted by a revision of the Brazilian sovereigns Rating Outlook to Negative from Stable or a lowering of the Country Ceiling to 'BB-' from 'BB';

--Please refer to the issuers' rating action commentary for negative rating sensitivities for their LC IDRs.

https://www.fitchratings.com/research/corporate-finance/fitch-revises-outlooks-for-31-brazilian-corporates-to-stable-affirms-ratings-18-07-2022

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20/07/2022 14:09

Fitch Revises Outlooks for 31 Brazilian Corporates to Stable; Affirms Ratings

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defned as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defned as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specifc best- and worst-case scenario credit ratings, visit https://www.ftchratings.com/site/re/10111579.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS

Companhia Energetica de Minas Gerais (CEMIG) has an ESG Relevance Score of '4' for Governance Structure due to ownership concentration, as a majority government-owned entity and due to the inherent governance risks that arise with a dominant state shareholder, which has a negative impact on the credit profle, and is relevant to the ratings in conjunction with other factors.

Petroleo Brasileiro S.A. (Petrobras) has an ESG Relevance Score of '4' for Human Rights, Community Relations, Access & Affordability due to the potential impact of social pressures on pricing policy in the future, which has a negative impact on the credit profle, and is relevant to the ratings in conjunction with other factors.

Petroleo Brasileiro S.A. (Petrobras) has an ESG Relevance Score of '4' for Governance Structure due to its nature as a majority government-owned entity and the inherent governance risk that arises with a dominant state shareholder, which has a negative impact on the credit profle, and is relevant to the ratings in conjunction with other factors.

Rede D'Or Sao Luiz S.A. has an ESG Relevance Score of '4' for Labor Relations & Practices due to labor/tax litigation. The company registers their employees (mostly physicians) as service providers, not as Rede D'Or's employees. This has a negative impact on the credit profle, and is relevant to the ratings in conjunction with other factors.

https://www.fitchratings.com/research/corporate-finance/fitch-revises-outlooks-for-31-brazilian-corporates-to-stable-affirms-ratings-18-07-2022

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20/07/2022 14:09

Fitch Revises Outlooks for 31 Brazilian Corporates to Stable; Affirms Ratings

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit- neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.ftchratings.com/esg.

RATING ACTIONS

ENTITY / DEBT 	RATING 			PRIOR 
Aegea Saneamento e Participacoes S.A.	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
	Negative
	LC LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
	Stable
Cemig Geracao e Transmissao S.A.	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
	Negative
	LC LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
	Stable
Energisa Sergipe - Distribuidora de	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
Energia S/A	Negative
	LC LT IDR	BB+ Rating Outlook Stable Affrmed	BB+ Rating Outlook
	Stable
BR Malls Participacoes S.A.	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
	Negative

https://www.fitchratings.com/research/corporate-finance/fitch-revises-outlooks-for-31-brazilian-corporates-to-stable-affirms-ratings-18-07-2022

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20/07/2022 14:09		Fitch Revises Outlooks for 31 Brazilian Corporates to Stable; Affirms Ratings
		LC LT IDR	BBB- Rating Outlook Stable	Affrmed	BBB- Rating Outlook
		Negative
	Cemig Distribuicao S.A.	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
		Negative
		LC LT IDR	BB Rating Outlook Stable		Affrmed	BB Rating Outlook
			Stable
	Petroleo Brasileiro S.A. (Petrobras)	LT IDR	BB- Rating Outlook Stable	Affrmed	BB- Rating Outlook
		Negative
		LC LT IDR	BB- Rating Outlook Stable		Affrmed	BB- Rating Outlook
			Negative
	Companhia de Gas de Sao Paulo -	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
	COMGAS	Negative
		LC LT IDR	BBB- Rating Outlook Stable	Affrmed	BBB- Rating Outlook
		Negative
	Rumo S.A.	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
		Negative
		LC LT IDR	BB+ Rating Outlook Stable	Affrmed	BB+ Rating Outlook
		Stable
	Energisa S.A.	LT IDR	BB Rating Outlook Stable	Affrmed	BB Rating Outlook
		Negative

https://www.fitchratings.com/research/corporate-finance/fitch-revises-outlooks-for-31-brazilian-corporates-to-stable-affirms-ratings-18-07-2022

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