S&P downgrades USJ

S&P said it lowered the global scale issuer credit rating on USJ Acucar e Alcool SA to CC from CCC- and placed it on CreditWatch with negative implications.

The agency also said it placed the company's C unsecured issue-level rating on CreditWatch negative.

The company recently announced an exchange offer proposal on its 2019 and 2021 notes.

The conclusion depends on the approval of 67% and 95% of the bondholders of the 2019 and 2021 notes, respectively, before April 19, S&P explained.

The agency said it believes the exchange proposal is a distressed off because the company would not be able to meet its interest, principal and other obligations under the normal schedule of maturities.

The negative watch reflects a view that a default is imminent and downgrades likely once the exchange offer is concluded, S&P said.

USJ has an unsustainable capital structure and weak cash generation, the agency added.

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