Fitch Ratings has downgraded the Foreign Currency (FC) and Local Currency (LC) Issuer Default Ratings (IDRs) for OAS S.A. and Construtora OAS S.A. to 'RD' from C' and the Long-term National Scale ratings to 'RD(bra)' from 'C(bra)'. In conjunction with these rating actions, Fitch has also downgraded the Long-Term IDR for OAS Investments GmbH to 'RD' from C' and the National Scale rating for OAS Empreendimentos S.A. to 'RD(bra)' from C(bra)'.
KEY RATING DRIVERS
These downgrades follow the announcement by OAS S.A. that it did not pay the principal and interest on its 9th debentures issuance, in the amount of BRL103 million, due January 5th. On Jan. 2nd, 2015, Fitch downgraded of the group's ratings to 'C'/'C(bra) following the announcement by OAS that it did not pay the interest on its USD400 million senior unsecured notes due 2021 in the amount of USD16 million, issued by OAS Finance Ltd., thus entering the 30-day cure period. This issuance is guaranteed by OAS S.A., Construtora OAS S.A. and OAS Investimentos S.A.
RATING SENSITIVITIES
Absent a material new event, OAS S.A. and its subsidiaries are likely to default on their debt in the near future. Fitch considers the agreement of all creditors to renegotiate their debt as unlikely.
Additional information is available at 'www.fitchratings.com
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (May 28, 2014);
--'National Scale Ratings Criteria' (Oct. 30, 2013).
Applicable Criteria and Related Research:
Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749393
National Scale Ratings Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=720082
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=964635
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