S&P lowers Sidetur

Standard & Poor's said it lowered the long-term corporate credit and senior unsecured ratings on Siderurgica del Turbio, SA (Sidetur) to CCC- from B-.

The ratings also were placed on CreditWatch with negative implications.

In October 2012, the government of the Bolivarian Republic of Venezuela took control of Sidetur's operating assets, but it hasn't announced the amount or time of the compensation, S&P said.

The government also required the transfer of all funds in the company's local-currency bank accounts. The dollar-denominated reserve account associated with Sidetur's notes due 2016 was not affected, the agency said.

The expropriation of Sidetur's assets could result in debt acceleration depending on the legal interpretation of either the change-of-control or the sale-of-assets clauses established under the indenture of its notes, S&P said, but no conclusion has been reached yet.

The level of uncertainty about the company's ability to meet its financial obligations within the next six months is high, the agency said.

The negative CreditWatch listing reflects the possibility of another downgrade if the company's debt is accelerated before it receives compensation, resulting in failure to meet its obligations, S&P added.

© 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.