S&P downgrades Odebrecht

S&P said it lowered its global scale corporate credit rating on Odebrecht Engenharia e Construção SA to CCC- from CCC.

At the same time, the agency lowered the long-term national scale corporate credit rating on the company to brCCC- from brCCC and affirmed the short-term national scale rating at brC.

The agency also lowered its issue-level ratings on Odebrecht Finance Ltd. to CCC- from CCC. The 4 recovery rating is unchanged, indicating an expectation for average (30%) recovery in the event of a default.

The outlook is negative.

“The downgrade reflects a view of the increased likelihood and incentives for a short-term debt restructuring or de facto default, given OEC's still weak cash flow generation and the Odebrecht group's increasingly restricted financial flexibility,” S&P said in a news release.

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