Fitch affirms Odebrecht

Fitch Ratings said it affirmed Odebrecht Engenharia e Construcao's long-term foreign and local currency issuer default ratings at CC and long-term national scale rating at CC(bra).

The agency also affirmed the CC/RR4 rating on the roughly $3.1 billion issuance of Odebrecht Finance Ltd., which Odebrecht Engenharia unconditionally and irrevocably guarantees.

Fitch said the CC/RR4 rating of Odebrecht Finance's unsecured debt reflects average recovery prospects in the event of a default, ranging between 31% to 50% of existing debt.

The agency said the ratings reflect Odebrecht's strong vulnerability to stress and weak liquidity that is not compatible with future principal and coupon payments and high working capital needs.

Fitch said that, in its view, the company still has several challenges to avoid restructuring its coupon payments and amortizations in 2019 of $184 million.

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