S&P lowers Odebrecht

Standard & Poor’s said it lowered the global scale corporate credit rating on Odebrecht Oleo e Gas SA to CC from CCC+.

The agency also said it revised the company’s stand-alone credit profile to CC from CCC+ and lowered the rating on Odebrecht Oil & Gas Finance Ltd. to CC from CCC+.

S&P also said it maintained these ratings on CreditWatch negative.

The downgrades reflect an assessment of risk of non-payment after Odebrecht Oleo announced it will exercise its right to defer the interest payment due March 18, given a 30-day grace period provision under the terms of the perpetual notes, the agency said.

The CreditWatch negative listing reflects the likelihood a downgrade to D if the company fails to make an interest payment on the perpetual bond of Odebrecht Oil & Gas by the end of the grace period, S&P said.

The CreditWatch listing also considers the risk of a cross acceleration of Odebrecht Oleo’s guaranteed bonds if there is an acceleration of the Odebrecht Oil & Gas bonds transaction, which remains in forbearance period, the agency said.

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