Fitch downgrades InterCement

Fitch Ratings said it downgraded InterCement Participacoes SA's long-term foreign- and local- currency issuer default ratings to C from CC and its wholly owned subsidiary InterCement Brasil SA's foreign- and local-currency IDRs to C from CC. Fitch additionally downgraded the ratings of the InterCement Financial Operations BV’s senior notes to C/RR4 from CC/RR4.

The agency also lowered the national scale long-term ratings for both entities to C(bra) from CC(bra).

“The downgrades to C follow InterCement's announcement of a missed payment on a non-material bank loan ($19 million loan from Banco HSBC SA) and the start of discussions with creditors to formally request of waivers for its 2Q23 payments. On June 8, 2023, the company faces a large amount of principal and interest (around $130 million) related to its local debentures.

“This strategy to preserve cash is an initial step of a more comprehensive debt restructuring process, which should constitute a distressed debt exchange (DDE) under Fitch's criteria. In this scenario, Fitch would likely downgrade the rating to RD, the agency said in a press release.

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