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Bond Market News
Guacolda Energia Upgraded to CCC- by S&P
August 25, 2023
Guacolda Energia was upgraded to CCC- from D by S&P. This comes after it completed the tender offer and debt exchange of its 2025s. Guacolda has reduced its debt by $22mn, after having paid ~$15mn in cash during the transaction. Additionally, it exchanged the $168mn 4.56% 2025s for new 10% 2030s and thus has improved its debt maturity schedule. S&P notes that Guacolda now has $83mn due in 2025 and the remainder due in 2030. S&P added that the CCC- rating reflects the “shareholder’s aggressive character, considering Guacolda’s two cash tender offers well below par value”. Shareholders considered the tender offer as tantamount to default. Besides, there also remains uncertainties regarding their future financial policies.
In July, Guacolda Energia’s 4.56% 2025s rallied by over 33% to 63 cents on the dollar after it launched the exchange offer. The bonds are currently trading at 64.9 cents on the dollar.
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