Rede D'Or Sao Luiz S.A. 'BB-' And 'brAAA' Ratings Affirmed Despite Weaker Leverage, Outlook Remains Stable

  • We expect Brazilian private hospital operator Rede D'Or Sao Luiz S.A. to continue posting strong revenue growth and high occupancy rates.
  • On the other hand, the company's aggressive capital expenditures (capex) plan for this year should maintain debt to EBITDA at around 3.5x.
  • SAO PAULO (S&P Global Ratings) April 10, 2019--S&P Global Ratings affirmed its 'BB-' global scale and 'brAAA' Brazilian national scale issuer credit and issue-level ratings on Rede D'Or.
  • The stable outlook reflects our expectation that the company will continue growing with solid operating efficiency, bolstering cash flows. This would allow Rede D'Or to deleverage, with debt to EBITDA trending towards 3x by 2020.
The ratings affirmation reflects our view that Rede D'Or will continue 
delivering solid revenue growth through organic launches and acquisitions in 
the next few years. The company's capex plan for 2019 is relatively 
aggressive, given plans for 1,500 new operational beds. Still, it shouldn't 
pose major risks, because Rede D'Or has already secured most of the funding 
for these investments.
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