S&P downgrades Oi SA

S&P said it downgraded Oi SA to B- from B and its national scale rating to brBBB- from brA-.

“We expect the Covid-19 pandemic to result in a recession, with Brazil's GDP contracting by 4.6% in 2020. This should affect Oi's top-line results, especially the pre-paid and fixed-line businesses, resulting in higher-than-expected RGUs decline this year and pressure on average revenue per unit (ARPU). We now forecast net revenues of R$19.3 billion in 2020 and 2021 compared to our previous forecast of R$21.5 billion and R$22 billion, respectively,” the agency said in a press release.

The outlook is negative.

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