Fitch affirms Odebrecht

Fitch Ratings said it affirmed Odebrecht Engenharia e Construcao SA's long-term foreign and local currency issuer default ratings at RD and long-term national scale rating at RD(bra).

Concurrently, Fitch affirmed the C rating of about $2.9 billion of Odebrecht Finance Ltd. issues, which Odebrecht Engenharia e Construcao unconditionally and irrevocably guarantees. The recovery rating was revised to RR5 from RR4.

“The ratings reflect the payment default of $103 million in coupons of OFL's senior unsecured notes as of November 2018 that are fully and irrevocably guaranteed by OEC,” the agency said in a news release.

“Other $61 million in late coupons are in the 30-day grace period.

“OEC's decision to suspend coupon payment has triggered cross-default clauses as is above the minimum threshold of $50 million for default, according to the perpetual bond indenture.”

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