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Fitch upgrades BR Malls' national long-term rating

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According to Market Intelligence, December 2022

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Fitch upgrades BR Malls' national long-term rating

Fitch upgraded BR Malls Participações SA's national long-term rating to AAA(bra) from AA+(bra) and its local currency issuer default rating, or IDR, to BBB- from BB+.

The company's local debentures rating was also upgraded to AAA(bra) from AA+(bra).

The rating agency affirmed the Brazilian mall operator's long-term IDR at BB, with a stable outlook.

Fitch said the upgrades are a result of a marked improvement in the company's capital structure, its firm liquidity and high-quality unencumbered assets.

BR Malls is also expected by Fitch to keep its leverage ratios on the conservative side by actively trying to lower its indebtedness, remove foreign exchange risks and reduce its average funding costs, all while targeting organic growth and efficiencies. The company generated 1.7 billion reais from a capital injection and approximately 824 million reais from its asset disposals, from which it used the proceeds to pare down its debt and boost its capital structure.

As Brazil's biggest retail mall operator, Fitch said BR Malls' ratings were supported by its robust business strategy, which held its own after being put through strong economic recession situations.

As of Sept. 5, US$1 was equivalent to 4.16 reais.