Fitch downgrades Oi

Fitch Ratings said it downgraded Oi SA's long-term foreign- and local-currency issuer default ratings to D from C.

Fitch also said it downgraded the company's national long-term rating and local debentures rating to D(bra) from C(bra).

The agency also said it affirmed the existing ratings for Oi's senior notes.

The downgrades reflect Oi's filing for a request for judicial reorganization with the court of the State of Rio de Janeiro, Fitch explained.

The request also includes Oi's subsidiaries, Oi Movel SA, Telemar Norte Leste SA, Copart 4 Participacoes SA, Copart 5 Participacoes SA, Portgual Telecom International Finance BV and Oi Brasil Holdings Cooperatief UA, the agency said.

Oi, beset by its debt-laden precarious capital structure and consistently negative free cash flow generation in recent years, was seeking to reach an agreement with its creditors for potential debt restructuring, Fitch said.

But the negotiation fell through and the company decided to file for judicial reorganization as an alternative for financial restructuring, the agency said.

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