Brazil-based hydropower generator CESP-Companhia Energetica de Sao Paulo has been posting sound cash flows and comfortable liquidity, despite drier conditions, thanks to solid power contracts' allocation strategy and cost-control initiatives. S&P Global Ratings affirmed its 'BB-' global scale and 'brAAA' national scale credit ratings on CESP. We also revised our stand-alone credit profile (SACP) of CESP to 'bb+' from 'bbb-', incorporating a wider pension plan deficit in the first quarter of 2021 because of high inflation measured by IGP-M and historically low interest rates in Brazil. The stable outlook on CESP reflects that on Brazil, given the sovereign rating cap on the company's credit quality. The stable outlook on CESP reflects that on the sovereign, given our view that ratings
