Research Update: Rumo's Stand-Alone Credit Profile Raised To 'bb' And National Scale Rating To 'brAAA' On Lower Leverage After Follow-On

Rumo's share offering, which raised about R$6.4 billion, will reduce adjusted leverage and support larger investments in the next years to capture higher volumes. We now expect Brazil-based railroad operator to post adjusted debt to EBITDA below 3.0x in the next few years. As a result, we're revising Rumo's stand-alone credit profile (SACP) to 'bb' from 'bb-' and raising the national scale ratings to 'brAAA' from 'brAA+'. At the same time, we're affirming our global scale ratings at 'BB-', because 'BB-' ratings on its parent, Cosan Ltd. (CZZ), act as a cap. The stable outlook reflects that of Cosan, which in turn is limited to that of Brazil's sovereign. The stable outlook reflects our expectation that ratings on the parent

...- Rumo's share offering, which raised about R$6.4 billion, will reduce adjusted leverage and support larger investments in the next years to capture higher volumes. We now expect Brazil-based railroad operator to post adjusted debt to EBITDA below 3.0x in the next few years. - As a result, we're revising Rumo's stand-alone credit profile (SACP) to '##' from '##-' and raising the national scale ratings to 'brAAA' from 'brAA+'. - At the same time, we're affirming our global scale ratings at '##-', because '##-' ratings on its parent, Cosan Ltd. (CZZ), act as a cap. - The stable outlook reflects that of Cosan, which in turn is limited to that of Brazil's sovereign....

Research Update