Mood’s Downgrades Construtora Andrade Gutierrez

Instant Max AI

(Global Credit Research, 21.Jan.2015) – Approximately $500 million of rated debt affected.

Moody’s Investors Service (Moody’s) downgraded to Ba2 from Ba1 the corporate family rating assigned to Construtora Andrade Gutierrez S.A. (CAG) and the rating of its guaranteed notes issued by Andrade Gutierrez International S.A. (AGInt). The outlook for all ratings was changed to negative from stable.

The downgrade of CAG’ ratings to Ba2 reflects the sharp deterioration in the company’s credit metrics in 2014 due to weaker than anticipated revenue growth and lower profit margins. Despite the company’s strong liquidity profile and track record of shareholder’s financial support, the change in outlook to negative reflects the deterioration in industry fundamentals on the back of corruption scandals at of Petrobras and macroeconomic uncertainties in Brazil and Venezuela, which could lead to higher execution risks for the company in the near term.

Ratings changed:

Company: Construtora Andrade Gutierrez S.A. (CAG)

–Corporate Family Rating: to Ba2 from Ba1

Issuer: Andrade Gutierrez International S.A. (AGInt)

— $500 million senior unsecured notes due 2018: to Ba2 from Ba1

The outlook for all ratings changed to negative from stable.

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