S&P downgrades Oi

Standard & Poor’s said it lowered the corporate credit and issue-level global scale ratings on Oi SA to CCC- from CCC and its national scale ratings to brCCC- from brCCC.

The recovery ratings on the company’s rated debt are unchanged at 4, indicating 30% to 50% expected default recovery.

The outlook remains negative.

Oi recently announced that Moelis & Co. will act as advisor for a group of Oi’s bondholders to facilitate potential restructuring, S&P explained.

A debt restructuring is likely to occur over the next six months, the agency said.

The company still carries an important amount of cash and some credit lines that total about R$11 billion as of the end of first quarter 2016, S&P said.

But it also has meaningful debt maturities over the next few quarters and very high leverage, the agency said. These are the main reasons behind company’s recent conversations about a potential debt restructuring, S&P said.

The negative outlook indicates the potential for a further downgrade to CC over the next six months if Oi announces an exchange offer or similar restructuring that would be considered a distressed exchange or equivalent to a default, the agency added.

© 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.