S&P slices InterCement Brasil

S&P said it lowered its ratings to InterCement Brasil SA to CCC+ from B and its national scale rating to brBB- from brA. The 3 recovery rating on the senior unsecured notes remains 3.

“InterCement's debt maturities in the next 15 months will be significant, including a bullet maturity of the $550 million senior notes due July 2024. Also, the group's debentures totaling R$4.5 billion have a payment-acceleration clause stating that if the senior notes are not refinanced by May 2024, all debentures will be mandatorily redeemable.

“Although InterCement still has a little more than one year to refinance the notes, refinancing risks are significantly increasing, in our view, given the upcoming maturity date and currently very tight financial conditions, both globally and in Brazil. The group has been in talks with banks to refinance the 2024 senior notes for some time now, but deteriorating credit market conditions since last year have extended conversations beyond our initial expectations,” S&P said in a press release.

The agency said it considers InterCement’s capital structure unsustainable, citing that the most important operations in terms of cash flow generation are in Argentina but access to that cash is restricted by government actions.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.