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Bond Market News
Raizen Downgraded to CCC- by S&P
March 6, 2026
Raizen was downgraded by two notches to CCC- from CCC+ by S&P. The downgrade followed Raizen’s announcement of a capital structure overhaul that could include a BRL $4bn ($760mn) equity injection from Shell and Aguassanta, asset sales, and a partial debt-to-equity conversion. S&P views the debt-to-equity conversion as a potential distressed exchange, tantamount to a default. Governance was also flagged as a negative factor, given shareholders’ prolonged disagreement and shift away from prior commitments. Despite a BRL $17bn ($3.2bn) cash balance at end-2025, persistent cash flow deficits, weak sugar and ethanol performance, and narrowing capital market access are expected to deplete Raizen’s liquidity. S&P noted that a further downgrade is likely if restructuring terms confirm a default-equivalent transaction. Last month, Raizen was downgraded by multiple notches after it hired legal and financial advisers to help address mounting financial stress.
Raizen’s bonds were trading stable. For instance, its 6.45% 2034 was at 47.7 cents on the dollar.
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