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Fitch Ratings has assigned a national debt rating of 'AA-(bra)' to Camargo Correa S.A.'s (Camargo) proposed BR950 million second debentures issuance. This issuance will consist of two series. The first series will have a bullet amortization during December 2014, while the second series will amortize between 2014 and 2016.

Fitch currently rates Camargo and its special-purpose vehicle CCSA Finance Limited as follows:

-- Foreign currency Issuer Default Rating (IDR) 'BB';
-- Local currency IDR 'BB';
-- National Scale rating 'AA-(bra)'.

CCSA Finance Limited

-- US$250 million senior unsecured bonds due 2016 'BB'.

The Rating Outlook is Negative.

CCSA Finance Limited is a special-purpose vehicle wholly-owned by Camargo and incorporated in the Cayman Islands. Its debt is unconditionally guaranteed by Camargo.

Camargo's credit ratings reflect the company's diversified portfolio of operations, adequate market position in the industries in which it participates, strong liquidity and high gross leverage. Further factored into Camargo's ratings is the high correlation of its core businesses of cement, engineering and construction, textiles and footwear with the general economic conditions of countries in which it operates, especially Brazil and Argentina. Camargo's ratings are supported by the company's long track record of successful acquisitions such as Loma Negra, Tavex, and Alpargatas Argentina. It also positively factors in the company's ability to secure long-term financing to fund its recent acquisition of Votorantim's stake in VBC Energia.

The Negative Outlook reflects deterioration in credit protection measures, which have worsened in early 2009, since the company took a more aggressive financial position to fund the acquisition of Votorantim's stake in VBC. Leverage ratios are now weak for the rating category on a net-debt basis. Structural subordination risk associated with a holding company structure is mitigated by Camargo's financial performance, adequate liquidity and important dividend flows from core operating companies and minority equity stakes.

Positive Results:

Despite a challenging operating environment during the first half of 2009 (1H'09), Camargo's results indicated resilience to the economic slowdown. Camargo's consolidated revenues for the last twelve months (LTM) ended June 30, 2009 were BR14.1 billion, an increase of 19.6% compared with the same period ended in June 2008. The growth in revenues reflects the company's well diversified revenue and EBITDA base across several industries. The company's EBITDA for the LTM ended in June 2009 was BR2.8 billion, an increase from BRL2.5 billion during 2008.

During the LTM ended June 30, 2009, Camargo generated BRL1.7 billion of Cash Flow From Operations (CFFO), a decline from BRL2 billion of CFFO during 2008. Dividends received from subsidiaries increased to BRL409 million for the LTM ended June 30, 2009, an improvement from BRL265 million in 2008. Fitch expects Camargo's cement, engineering and constructions businesses to continue to benefit from recent improvement in Brazil's economic environment.

Leverage Increases Sharply During 2009:

Camargo' leverage, as measured by net debt/EBITDA, increased to 2.6 times (x) as of June 30, 2009 from 1.5x as of Dec. 31, 2008. The sharp increase in debt was due to Camargo's acquisition of Votorantim's 50% stake in VBC Energia for BRL2.6 billion during February 2009. This acquisition allowed Camargo to increase its stake in VBC Energia to 100%. VBC Energia, in turn, owns 25.6% of the Brazilian power holding company, Companhia Paulista de Forca e Luz (CPFL). This transaction resulted in an increase in Camargo' total consolidated debt to BRL10 billion at the end of June 2009 from BRL 6.8 billion as of Dec. 31, 2008. The company's debt consists of BRL7 billion of Bank loans and BRL3 billion of debentures.

Tight Liquidity Position:

Camargo has had a history of maintaining large cash balances on its balance sheet in order to facilitate acquisitions and mitigate market volatility. As of June 30, 2009, Camargo had BRL2.3 billion of consolidated cash and marketable securities. Short-term debt is high relative to cash. As of June 30, 2009, the company had BRL2.5 billion of short-term debt. The company intends to refinance much of its working capital debt. The rest of its debt obligations will be funded with cash flow, cash and marketable securities, and new debt, including the proposed BRL950 million debenture.

Camargo Correa is one of the largest private industrial conglomerates in Brazil generating BRL14.1 billion of net revenues and around BRL2.8 billion of EBITDA for the last-twelve month period, ended in June 30, 2009. Camargo is a holding company with full ownership interests in cement, engineering and construction companies. Control position in homebuilding, textiles, footwear and sportswear manufacturing companies. Equity interests in energy, transportation (highway concessions) and steel businesses. A large proportion of the company's equity investments are in companies that are publicly traded and liquid. The company is controlled by the Camargo family through their direct holdings in Participacoes Morro Vermelho, which in turn owns 100% of Camargo.

Additional information is available at 'www.fitchratings.com'.

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