Research Update: Oi S.A. Issuer Credit Ratings Cut To 'SD' On Approval Of Its Amended Reorganization Plan

Brazil-based telecom operator Oi S.A. announced that the judicial court ratified the amendment to the company's judicial reorganization plan (JRP), which was approved by the majority of its credit holders on Sept. 8, 2020. The amendment includes a discount on debt for some of its debtholders, which we assess as equivalent to default. According to the amendment approved, debt owed to banks and export credit agencies (ECAs) will be prepaid with a 55% discount following asset sales, which are expected to be completed during the next few quarters. On Oct. 9, 2020, S&P Global Ratings lowered its global scale and national scale issuer credit ratings on Oi to 'SD' from 'CC' and 'brCC', respectively. The 'CCC-' issue-level rating is unchanged

...- Brazil-based telecom operator Oi S.A. announced that the judicial court ratified the amendment to the company's judicial reorganization plan (JRP), which was approved by the majority of its credit holders on Sept. 8, 2020. The amendment includes a discount on debt for some of its debtholders, which we assess as equivalent to default. - According to the amendment approved, debt owed to banks and export credit agencies (ECAs) will be prepaid with a 55% discount following asset sales, which are expected to be completed during the next few quarters. - On Oct. 9, 2020, S&P Global Ratings lowered its global scale and national scale issuer credit ratings on Oi to '##' from '##' and 'brCC', respectively. The '###-' issue-level rating is unchanged because the amendment didn't affect terms and conditions for this debt. - The amendment also includes the creation of five distinct production units (IPUs) to separate Oi's assets and facilitate asset sales, which may generate a significant amount of...

Research Update