Fitch downgrades Genneia

Fitch Ratings said it downgraded Genneia SA’s foreign- and local-currency issuer default ratings to C from CCC. Fitch also downgraded Genneia’s $500 million of notes due 2022 to C/RR4 from CCC/RR4.

The downgrades follow Genneia’s announced launch of a tender to exchange its $51.5 million class XXI notes due Nov. 23 for new notes, named class XXX, due in 2022, Fitch said.

“The rating reflects the risk the company will be prohibited from accessing the official exchange rate market, under the new capital control rules issued by the Central Bank of Argentina, to repay noteholders that do not participate in the exchange, resulting in a default per Fitch’s definition,” the agency said in a press release.

Fitch said it does not consider this offer a distressed debt exchange per its DDE criteria. The proposal does not change the class XXI notes’ terms, and Fitch does not consider the offer coercive to the noteholders. The agency said it estimates Genneia can fully repay the note, given its strong liquidity. Fitch does not rate Genneia’s class XXI notes.

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