Fitch: 10 Most Distressed LatAm Corporates; Debt Restructuring May Be Unavoidable for CSN
By Business Wire News
Link to Fitch Ratings’ Report: Companhia Siderurgica Nacional—Scenario Analysis (The Next Giant to Fall?)
It is unlikely Companhia Siderurgica Nacional (CSN) will achieve free cash flow neutrality through asset sales, heightening risk of a debt restructuring within the next 24 months, according to the latest report in Fitch’s 10 report series: “10 Most Distressed LatAm Corporates.”
One report will be released each day through Feb. 12th per the schedule found at end of this release.
“Negative pressures on CSN’s cash flow are not expected to abate in 2016. If iron prices average USD45 per ton, we are looking at the need for asset sales of around BRL2.0 billion for the company to be free cash flow neutral in 2016,” said Phillip Wrenn / Associate Director. “But we believe monetizing assets in this environment will be extremely challenging.”
Unprecedented market conditions including the sharp drop in iron ore prices, collapse in Brazilian steel demand, and rising benchmark interest rates impacted CSN’s credit profile and contributed to the deterioration of the company’s credit profile.
Fitch’s 10 Most Distressed LatAm Corporates series will be released one report per day as follows:
Feb. 1st: Samarco Mineracao S.A.
Feb. 2nd: Companhia Siderurgica Nacional
Feb. 3rd: Pacific Exploration and Production Corporation
Feb. 4th: GOL Linhas Aeresas S.A.
Feb. 5th: Oi S.A.
Feb. 8th: GeoPark Latin America Limited Agencia en Chile
Feb. 9th: Ajecorp B.V.
Feb. 10th: TV Azteca, S.A.B. de C.V.
Feb. 11th: QGOG Constellation S.A.
Feb. 12th: Odebrecht Offshore Drilling Finance Ltd.
For more information, a special report titled “Companhia Siderurgica Nacional—Scenario Analysis” is available on the Fitch Ratings web site at www.fitchratings.com.
Additional information is available at ‘www.fitchratings.com‘.
Fitch Ratings, Inc.
70 W Madison St
Chicago, IL 60602
Elizabeth Fogerty, New York, +1-212-908-0526