... Eletricidade de Spo Paulo S.A.'s ratings reflect moderate leverage, strong liquidity and a lengthened debt maturity profile. The company benefits from its conservative business risk profile and exclusive rights to distribute electricity within its concession area in the Metropolitan Region of Greater Spo Paulo, Brazil. The ratings incorporate a moderate regulatory and hydrological risk for the Brazilian power sector. Negative FCF: Fitch Ratings' expectation of negative FCF in the next two years limits Eletropaulo's ratings. This assumption is based on the company's need for capex, operating expenses and the possible repayment, from July 2017 onward, of the liability balance of the Portion A Variation Account (CVA). The company's operational efficiency, measured by quality indicators, is currently below regulatory levels and requires strong investments to bring indicators to acceptable levels. Moderate Leverage to Remain: Fitch believes...
