Fitch downgrades Ouro Verde

Fitch Ratings said it downgraded Ouro Verde Locacao e Servico SA's (Ouro Verde) long-term foreign- and local-currency issuer default ratings to RD (restrictive default) from C.

Fitch also said it downgraded the company's national scale rating and local debenture to RD(bra) from C(bra).

The downgrades reflect the extension of multiple waivers on the company's 5th, 6th, 7th and 8th debentures issuances, Fitch said.

The multiple waivers are part of the company's effort to restructure its debt, which is the only remaining precedent condition to the sale of the company to Cedar Fundo de Investimento em Participacoes Multiestrategia, a Brookfield investment vehicle in Brazil, the agency said.

The Ouro Verde debt restructure, if concluded, will represent a distressed-debt exchange, as it should impose material reduction in terms compared with the original contractual terms, Fitch said.

When further information is available regarding Ouro Verde's new debt profile and operating performance prospects, Fitch said it expects to re-rate Ouro Verde's issuer default ratings and its debenture issuances.

The restructuring agreement should result in a significant extension of the maturity date of those debentures and representing 58% of Ouro Verde's total debt, the agency said.

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