Moody's cuts CPFL Renovaveis' rating to A1.br

Oct 28, 2014 - Moody's on Monday downgraded its national scale rating on Brazilian renewable energy company CPFL Renovaveis (BVMF:CPRE3) to A1.br from Aa3.br and confirmed the Ba2 global scale rating, revising the outlook to "negative" from "stable".

The downgrade in national scale rating reflects weaker than expected cash flow generation in the last 18 months and weak consolidated credit metrics, while the outlook reflects uncertainties about the company's ability to post stronger credit metrics in the short to medium term, the agency said. Moody's considered sizable planned investments and current drought conditions in Brazil which could continue to impact the company's cash flow.

As of October 1, 2014, CPFL Renovaveis had an installed capacity of 1,773 MW, including 399 MW in small hydro plants, 1,003 MW of wind farms, 370 MW of biomass and a 1.1-MW solar facility. The company is building an additional 335.5 MW.

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