Brazil-based hydropower generator CESP – Companhia Energética de São Paulo will conduct a capital reduction of R$2.6 billion, after the conclusion of its R$2.1 billion debentures issuance, to support liability management efforts at its parent company, Auren Energia S.A. (not rated). Following the conclusion of the transaction, we expect CESP's credit metrics to erode. Nevertheless, we expect Auren to provide financial support to CESP, if necessary, given the importance of the subsidiary to the group. In this context, S&P Global Ratings affirmed its 'BB' global scale and 'brAAA' national scale credit ratings on CESP. At the same time, we revised downward CESP's stand-alone credit profile (SACP) to 'b+' from 'bb'. The outlook remains stable, reflecting our view that CESP will
