Brazil-based telecommunications carrier Oi has completed a corporate reorganization this year, which we see as a positive for its business profile and governance. We are affirming the 'BBB-' ratings on Oi. We expect Oi to maintain strong cash generation, despite higher capital expenditures and competition in the industry, leading to adequate financial ratios. On June 1, 2012, Standard&Poor's Ratings Services affirmed its 'BBB-' global scale corporate credit ratings on Oi S.A. and its subsidiary Telemar Norte Leste S.A. (TMAR). We see Oi and TMAR as a single entity for the purpose of our analysis. The affirmation follows the group's recently completed corporate reorganization, which we believe will bring improvements in corporate governance and some costs savings. Oi's profitability
