S&P slashes Metalcorp

S&P said it cut Metalcorp Group SA’s issuer rating to SD, Selective Default, from B, after the company reported it did not repay its €70 million maturity that was due on Monday. The agency also slashed the rating on the €300 million notes due in 2026 to C from B, indicating that they are highly vulnerable to nonpayment or restructuring.

Metalcorp plans to seek a waiver on the notes. “At this stage, it is not clear if the waiver will be limited to the cross-default clauses or also other terms. The next coupon is only expected in June 2023, but given the unexpected principal nonpayment on the €70 million notes, and the subsequent uncertainty on the company's business and financial profile, we cannot rule out that a future debt restructuring will include also the 2026 notes. Therefore, we are lowering the issue rating on this debt instrument to C,” S&P said in a press release.

The company said it had planned to refinance the notes through cash, commodity financing and a term loan facility, but the loan counterparty reneged.

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