On March 31, 2020, gross debt reached BRL3,432.4 million, an increase of BRL188.6 million from the balance on December 31, 2019, mainly due to the higher effect of exchange variation on foreign currency debt. Note that all debt in accordance with Law 4,131 is hedged through swap operations. The Company did not raise funding operation in 1Q20.

Pursuant to CPC 06 (R2), starting from January 2019, the Company started recognizing obligations for future payments for all leasing agreements, except short-term and/or low-value agreements. In 1Q20, BRL57 million was added to IFRS gross debt, related to the Company’s leases. As such, IFRS gross debt totaled BRL3,489.5 million. The regulatory accounting did not change.

The decrease in cash and cash equivalents reflects the change in the investment strategy combined with the worsening economic scenario: cash was transferred from the funds, which are consolidated at ISA CTEEP, to CDBs which are not consolidated. Excluding the cash and cash equivalents of joint ventures, the Company’s net debt reached BRL2,665.6 million at the end of March 2020, As against BRL2,546.6 million in December 2019, while the Net Debt/Adjusted EBITDA ratio closed 1Q20 at 1.1x.

The company is compliant with the covenants and requirements for all of its issues. For 2020, the most restrictive Net Debt/EBITDA index is 3.0x. Greater details on financial indicators are available in Attachment V to this document.

Average cost of consolidated debt was 6.4% p.a. on March 31, 2020, compared to 7.4% p.a. on December 31, 2019, due to the decline in IPCA between the periods. IPCA is the company’s main index for debt and revenues. Average term of consolidated debt on March 31, 2020 was 3.8 years.

From April to December 2020, debt amounting to BRL1.2 billion is expected to mature, consisting mainly of debt pursuant to Law 4,131/62 and the 6th issue of debentures.

Gross Debt Amortization Schedule
(BRL million)

Debt Contracting and
Indices 03/31/2020


  
Issue Total offering Nominal Unit Value Series Issue Maturity Remuneration Documents
4th Issue R$ 148.3 million R$ 1 thousand Single Series 07/15/2016 07/15/2021 IPCA + 6.04%


5th Issue

 
R$ 300.0 million R$ 1 thousand Single Series 02/15/2014 02/15/2024 IPCA + 5,04% per year (Portuguese Only) (Portuguese Only) (Potuguese Only) (Portuguese Only) (Potuguese Only) (Potuguese Only) (Potuguese Only)
(Portuguese Only)
Report Rating (FITCH)
(Potuguese Only)
6th Issue R$ 350 million R$ 1,000 Single 12/13/2017 12/13/2020 105,65% of CDI per year
7th Issue R$ 621.0 million R$ 1,000 Single 02/05/2018 04/15/2025
IPCA + 4,70  per year
8th Issue R$ 409.0 million R$ 1,000 Single 12/20/2019 12/15/2029 IPCA + 3.50 per year
  Debenture
Issue Total offering Nominal Unit Value Series Issue Maturity Remuneration Documents
2nd Issue R$ 350 million R$ 10 thousand Single 03/18/2013 03/18/2025 IPCA + 5.5% per year
  Debenture
Issue Total offering Nominal Unit Value Series Issue Maturity Remuneration Documents
1st Issue R$ 1.6 billion 1.000 Single 12/15/2019 12/15/2043 (24 years) IIPCA + 4.9982% per year

Updated on June 30, 2020.