Fitch lowers Libra Terminal, debt to C

Fitch Ratings said it downgraded Libra Terminal Rio SA's long-term issuer default rating to C from CCC and national long-term rating to C(bra) from CCC(bra) following the company's announcement that it is submitting a formal plan to restructure its existing debts.

The agency also downgraded the rating assigned to the 1a Emissao de debentures in total amount of R$270 million due 2019 to C(bra) from CCC(bra).

Fitch said the downgrade was driven by the imminent default on financial obligations given critical cash flow generation and the expectation that the proposal will include material changes to existing terms with current debt holders, particularly the extension of maturity dates, leading it to be considered a Distressed Debt Exchange (DDE) according to Fitch's applicable criteria.

The announcement proposing the restructuring was made on Nov. 30, with an investor assembly called for Dec. 15. Libra Terminal management's proposal is expected to include a new payment schedule to the debentures and other existing debt, replacement of guarantees and proposal of new covenants, representations and/or warranties, the agency added.

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