Fitch downgrades Solocal

Fitch Ratings said it downgraded Solocal Group's long-term issuer default rating to C from CC and its senior secured debt to CC from CCC-. The recovery rating on the senior secured debt is RR3.

“The downgrade reflects Solocal's missed payment of interest that was due on June 15. The company has entered a 30-day grace period to cure the payment as provisioned in the debt documentation. This follows the company's announcement on June 7 of its intention to defer its coupon payments in June and in September 2023 on its €176.7 million and €18.7 million floating-rate notes, which mature in 2025. We expect Solocal to negotiate with bondholders for a waiver or a standstill agreement on payments due for the rest of 2023,” the agency said in a statement.

Fitch said it plans to drop the IDR to RD, restricted default, if the interest payment deferral is not cured by the end of the original grace period, under its rating definitions.

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