Fitch Upgrades EDC

Fitch has upgraded Venezuela’s Electricidad de Caracas (EDC) to BB minus from B+, and assigned a rating of BB minus to the $650m in 8.5% 2018 bonds placed in the local market April 2. The proceeds went towards repayment of a $247m bond buyback concluded last month, and for other corporate purposes, says an EDC spokeswoman. Buyers of the EDC bonds paid in local currency and received dollar-denominated notes, a strategy the government uses to keep the black currency market in check. The rating comes as many holders may sell bonds to international investors. Fitch’s upgrade is based on strong support from controlling owner PDVSA and the government, it says, despite increasing leverage and tariff uncertainty.