S&P drops InterCement Brasil

S&P said it downgraded InterCement Brasil to CCC from B- and to brB- from brBBB- on the national scale.

“Last week, the company has completed the refinancing of R$4.7 billion in debentures and loans, extending debt maturities to 2023-2027 from 2020-2024. While this was an important step to reduce principal payments over the next years, we now see greater liquidity pressures due to our current expectation of significant cash burn this year and the uncertainties over the recovery path,” S&P said in a press release.

“We currently forecast EBITDA close to €200 million this year, compared with interest expenses of around €120 million, and working capital and capital expenditures totaling about €150 million. This would result in liquidity strains, in our view, even assuming that the company continues refinancing its debt maturities as they come due over the next months,” the agency said.

The agency removed all the ratings from CreditWatch with negative implications and assigned a negative outlook.

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