Odebrecht nears refinancing deal with lenders
December 7, 2018 |
Brazilian conglomerate could come to an agreement with four banks in the next month, sources say
Brazil's Odebrecht could reach an agreement in the next month to refinance BRL32bn ($8.25bn) in loans from four banks, LatinFinance has heard.
"They are close to a deal with Bradesco, Itaú, BNDES and Banco do Brasil," said a lawyer representing one of the lenders. "The banks that are cooperating and supporting Odebrecht are in the most advanced negotiations."
The Brazilian conglomerate owes BRL13bn to the national development bank BNDES, along with BRL10bn to the state-owned lender Banco do Brasil and BRL4.5bn apiece to Bradesco and Itaú, the lawyer said.
Odebrecht owes another BRL11.3bn to local and international lenders, with BRL7.5bn for the federal savings bank Caixa Econômica Federal, BRL1.5bn each for Santander and SMBC and $800m for Banco Votorantim, he added.
Odebrecht is also looking to restructure more than $20bn in outstanding bonds, with Moelis and RK Capital as advisors. AllianceBernstein holds $180m in Odebrecht bonds, while Fidelity Investments has $170m, Signal has $40m and Gramercy has $19m, said a bond banker in New York.
But those investors hold just 8% of Odebrecht's outstanding bonds, which means the conglomerate will have to deal with many other creditors looking to limit their losses in a restructuring, the banker said.
However Odebrecht tries to restructure its debt, investors can expect to see sharp losses as the conglomerate appears headed for bankruptcy and as its 2029 bonds trade for 16 cents on the dollar, he added.
"The bondholders need to ask themselves if Odebrecht can survive as an ongoing concern or whether its ability to conduct business is going to be limited," he said, adding that creditors may benefit most from debt-for-equity swaps with Odebrecht if the business survives.