TEXT-S&P revises Ampla Energia e Servicos to positive

Overview
-- Brazil-based electricity distribution company AMPLA continues to enjoy
adequate credit metrics and is gradually improving its operations.
-- We are revising the outlook to positive from stable and affirming our
ratings, including the 'BB' global scale and 'brAA-' national scale corporate
credit ratings, on AMPLA.
-- The positive outlook reflects Ampla's improving operations and strong
financial metrics for its rating category, which could boost its liquidity.

Rating Action
On Dec. 4, 2012, Standard & Poor's Ratings Services revised its outlook Ampla
Energia e Servicos S.A. (AMPLA) to positive from stable. At the same
time, we affirmed our 'BB' global scale and 'brAA-' national scale corporate
credit ratings on the company.

Rationale
The outlook revision reflects our expectations that AMPLA's operations will
continue to improve and that credit metrics will remain strong for the rating
category, leading to a more robust liquidity and an upgrade. The ratings on
AMPLA reflect its "fair" business risk profile, "significant" financial risk
profile, and "less than adequate" liquidity.

The corporate credit rating reflects AMPLA's somewhat weak operating metrics
due to its high level of electricity losses and past-due receivables and its
large capital expenditures, which pressure free cash-flow generation. The
ratings also incorporate AMPLA's strong credit metrics for its rating
category, rising consumption, and favorable growth prospects in its concession
area.

We assess Ampla's business risk profile as "fair" under our criteria. The
company has the exclusive right to distribute electricity in part of the state
of Rio de Janeiro and serves stable and sizable residential and commercial
customer bases. Nevertheless, AMPLA's concession area is challenging and
requires a significant amount of investment to improve operations. Although
the company's electricity losses are gradually improving, they are still
high--19.4% in the 12 months ended September 2012--and past-due receivables
remain elevated. AMPLA's annual tariff readjustment resulted in an increase of
7.01%, boosting its operating margins. We expect that the next tariff review
cycle, to take place in 2014, will have a modest impact on cash generation and
margins. We favorably view the overall predictability and stability of the
regulatory framework that governs the Brazilian electricity sector.

We view AMPLA's financial risk profile as "significant." The company has
strong credit metrics for its rating category. Its total debt to EBITDA was
2.1x and funds from operations (FFO) to total debt was 28.3% for the 12 months
ended Sept. 30, 2012, and we expect these metrics to improve slightly in 2012
and 2013 and to reach about 2.3x and 30%, respectively, in 2014 as a result of
the tariff review. The company refinanced its short-term debt following the
June 2012 issuance of the R$400 million debenture, improving its capital
structure.

The company has the concession to distribute electricity to 66 municipalities
(65 in the state of Rio de Janeiro and one in the state of Minas Gerais),
serving approximately 2.7 million customers. In the nine months ended
September 2012, the company distributed 7,799 gigawatt-hours (GWh) of
electricity, with captive consumers accounting for 6,675 GWh of the total.

Liquidity
We continue to assess AMPLA's liquidity as "less than adequate" because we
foresee higher cash uses than sources in 2012 and 2013. The company's large
capital expenditure plan and its dividend distributions limit the liquidity
and ratings. We asses AMPLA's liquidity based on the following assumptions and
expectations:
-- Liquidity sources (including cash and FFO) will exceed cash uses

by less than 1.2x for the next two years; and
-- Negative free operating cash flow in 2013 due to high capital
expenditures and moderate dividend distribution.

Liquidity sources include our expectation of more than R$600 million in FFO
for the next two years and nominal cash balances. Uses of liquidity include
short-term debt maturities of about R$150 million, capital expenditures of
about R$450 million, and the dividend distributions payout of 25%.

The mitigating factor is our expectation that AMPLA will continue enjoying
adequate access to banks and debt capital markets to refinance its debt. Also,
in our view, the company has adequate cushion under its financial covenants to
survive a significant drop in EBITDA.

Outlook
The positive outlook reflects our expectations that AMPLA's operations will
continue to improve and that credit metrics will remain strong for the rating
category. This could lead to a more robust liquidity and an upgrade. We expect
that the relatively high capital expenditure program to reduce electricity
losses and improve quality metrics will lead to stronger operating margins and
an improving business profile. We expect the company to post total debt to
EBITDA of about 2x and FFO to total debt of 30%-35% in 2012 and 2013.

Conversely, we could lower the ratings if the company's operations
deteriorate, reducing its operating cash flow generation, or if it makes
aggressive dividend distributions, even amid significant capital expenditures,
pressuring its liquidity even more.

Related Criteria And Research
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

Ratings List

Ratings Affirmed; Outlook Action
To From
Ampla Energia e Servicos S.A
Corporate Credit Rating BB/Positive/-- BB/Stable/--
Brazilian Rating Scale brAA-/Positive/-- brAA-/Stable/--
Senior Unsecured brAA-

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.