Fitch lowers Libra Terminal

Fitch Ratings said it downgraded Libra Terminal Rio SA’s long-term issuer default rating to CCC from BB and national long-term rating to CCC(bra) from AA-(bra).

The agency also said it downgraded Libra Rio’s unsecured debentures to CCC(bra) from AA-(bra).

The multi-notch downgrade reflects the swift deterioration of the group’s consolidated credit profile and the severe deterioration of its operating cash flow generation, hampering its ability to service impending consolidated financial obligations, Fitch said.

The companies within the group have breached debt covenants, which resulted in R$1 billion of its total consolidated debt of R$1.6 billion to be reclassified as short-term debt, the agency said.

There are cross default clauses between the debentures and the other Libra Rio’s debt, Fitch added.

The agency said it expects 2016 will continue to be a difficult year for business in Brazil, following the weak financial performance in 2015, the agency said.

As a result, it will be challenging for Libra Rio to significantly improve its consolidated credit profile based solely on its standalone operating fundamentals, Fitch 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.