Fitch Keeps Brazil’s Rumo at BB+ With a Negative Outlook, and Cosan Is the Reason

BRAZIL · MARKETS

Fitch Ratings kept Rumo, Brazil’s largest railway operator, at BB+ this week but attached a negative outlook. The agency removed its negative watch, yet warned that parent company Cosan still caps the rail firm’s credit.

A Rumo freight train crossing rural Brazil. Fitch kept the railway at BB+ but warned that parent Cosan’s finances still cap its rating. (Photo: internet reproduction)

Why the negative outlook follows Cosan

The decision came on Tuesday 26 August, days after Fitch made the same move on Cosan. The agency affirmed Rumo’s long-term ratings at BB+ and its national rating at AAA(bra), the top grade.

Fitch applies a parent-and-subsidiary methodology to the two companies. Under those rules, Rumo’s rating cannot drift far above Cosan’s BB- grade.

Cosan controls Rumo with about 30 percent of its capital and a majority of board seats. Its own negative watch was lifted on 21 August, after divestments and debt reduction.

The group has been selling holdings, including its logistics arm Compass, to cut a heavy debt load. Its fuels venture Raízen, co-owned with Shell, entered extrajudicial recovery earlier this year.

Shell agreed to inject R$3.5 billion (US$680 million) into Raízen to keep it running. That support steadied Cosan but did not remove the pressure on its credit profile.

Rumo’s own books stay solid

On its own, Rumo looks far stronger than its negative outlook suggests. Fitch praised its solid business position, robust operating cash flow, and strong liquidity.

The agency expects free cash flow to stay negative through 2028 as investment continues. Even so, it projects net debt at or below three times Ebitdar in 2026 to 2028.

Ebitdar is earnings before interest, taxes, depreciation, amortization, and rent. First-quarter results backed that confidence.

Rumo moved a record 20.2 billion useful tonne-kilometers from January to March, up 25 percent from a year earlier. Useful tonne-kilometers measure freight by weight and distance.

Adjusted EBITDA reached R$1.75 billion (US$339 million), up 7 percent year on year. EBITDA is earnings before interest, taxes, depreciation, and amortization.

Net debt stood at R$16.9 billion (US$3.28 billion) at the end of March. That equals 2.1 times adjusted EBITDA, a comfortable level for a capital-intensive railway.

What Cosan does. Cosan S.A. engages in the fuel distribution business. It operates through Raízen, Compass, Moove, Rumo, and Radar segments. The company's Raízen segment engages in the production, marketing, origination, and trading of sugar, as well as ethanol; production and marketing of bioenergy, and solar energy and biogas; trading and resale of electricity; and…

What the negative outlook means

A negative outlook signals that a downgrade is possible within 12 to 24 months. For Rumo, the risk travels downhill from Cosan rather than up from the tracks.

Other agencies have been tougher on the railway. Moody’s cut Rumo to Ba3 in June, and S&P Global rates it BB-, both with a negative view.

Fitch’s national-scale AAA(bra) shows how strongly domestic analysts view Rumo’s standalone strength. The gap with the BB+ global grade is entirely a Cosan story.

The next trigger is how fast Cosan keeps cutting debt. Asset sales and Raízen’s restructuring will decide whether the outlook stabilizes or turns into a downgrade.

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Sources: Valor Econômico, Fitch Ratings, Rumo first-quarter 2026 results, Moody’s and S&P Global. Exchange rate: R$5.1503 per US dollar on 27 August 2026.

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