Fitch slashes Oi

Fitch Ratings said it downgraded Oi SA's long-term local- and foreign-currency issuer default ratings to CC from CCC+. The agency also lowered Oi's unsecured senior notes due 2025 to CC/RR4 from CCC+/RR4, and Oi Movel SA's secured 2026 notes to CC/RR4 from CCC+/RR4, and the national long-term rating to CC(bra) from B(bra).

“The downgrades reflect the increased likelihood of a debt restructuring along with Oi's unsustainable leverage, due to weak cash flow prospects and limited expected dividends over the next several years from its approximate 35% stake in V.tal. The downgrades also reflect Fitch's expectations of interest coverage below 1x, as well as the underperformance relative to Fitch's prior expectations of Oi's improved capital structure following asset sales,” the agency said in a press release.

Oi has hired advisors to help it in talks with creditors under the framework of the judicial recovery plan, Fitch said.

“In Fitch's view, if the outcome of these negotiations results in a material reduction in terms compared with the contractual terms agreed under the 2018 restructuring, the agency would downgrade the company's ratings to C,” the agency said.

© 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.