S&P downgrades Oi

S&P said it downgraded its global scale issuer credit ratings to CC from B- and its national scale rating to brCC from brBBB- on Oi SA.

“Brazil-based telecom operator Oi SA announced a proposed amendment to its judicial reorganization plan (JRP) that includes a potential debt haircut for some of its debtholders, which our criteria would assess as equivalent to default,” S&P said in a press release.

According to the proposal, debt owed to banks and export credit agencies could be prepaid with a 60% haircut following asset sales expected to be completed in the second half of 2021, S&P said.

S&P said it also downgraded the issue rating to CCC- to mirror the heavy capital structure and challenges in completing the reorganization plan.

The outlook is negative.

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