Fitch downgrades OEC

Fitch Ratings said it downgraded OEC SA's long-term foreign and local currency issuer default ratings to CC from CCC- and national long-term rating to CC(bra) from CCC(bra). The agency also lowered OEC Finance Ltd.'s $1.9 billion senior unsecured payment-in-kind (PIK) toggle notes to C/RR5 from CC/RR5. The notes are guaranteed by OEC.

“The downgrade reflects OEC's heightened refinancing risk and weak financial flexibility to service debt maturities in 2024. The company's still limited operating cash flow generation and estimated cash position of about R$350 million, as of September 2023, has been weak to support debt amortizations and coupon payments of about $100 million during 2024.

“OEC's capital structure remains unsustainable. The company is still challenged to pursue new contracts and recover profitability consistently to support operations, although EBITDA generation gradually improved during the second half 2023,” Fitch said in a press release.

The agency noted a debt restructuring is a “real possibility.”

© 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.