Reuters: Regulatory News: FINNEWS LATAM-Exit Eletrobras bonds as Brazil sets new power sector rules-Barclays

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FINNEWS LATAM-Exit Eletrobras bonds as Brazil sets new power sector rules-Barclays Nov 5th 2012, 22:27 Mon Nov 5, 2012 5:27pm EST Barclays analysts led by Ivan Fernandes are recommending investors exit their debt holdings of Brazilian state-run power holding company Centrais Eletricas Brasileiras SA after new rules to renew electricity licenses are likely to cut operating earnings by half next year. Bonds of Eletrobras, as Centrais is known, are likely to underperform relative to those of Petróleo Brasileiro SA , Brazil's state-controlled oil producer, Fernandes said in a report on Monday. The amount of money Eletrobras is being reimbursed for an early termination of certain licenses will fall short of remunerating investors and funding capital expenditures, which is likely to drive net debt to about 14 times operational earnings by the end of next year, from about 2.8 times now, he noted.

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