Moody’s joins Fitch and downgrades OHL’s note while executing the refinancing of the bonds

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The rating agency Moody’s has joined this morning Fitch and it has lowered the note on the probability of default of OHL. He rating goes to ‘Ca’, from Caa2. If the construction company already had a low solvency rating, the entity now hangs the highly speculative debt poster, at a lower rating step (C).

The aforementioned Fitch left its note at ‘C’ yesterday from the previous step ‘CC’, worsening OHL’s debt within the range of “extremely speculative”.

These reductions are within the usual in an emergency refinancing such as the one you are carrying out OHL. The construction company has stressed to the CNMV that Moody’s “has maintained the rating corporate and rating of the two OHL bond issues, lowering the probability of default (PDR) from Caa2-PD to Ca-PD “.

OHL has negotiated with the bondholders a reduction of up to 105 million euros, from 593 million, through the issuance of a new bond and the conversion of part of the debt into equity. The new bond includes a three-year extension in maturities, with 50% in 2025 and the other half in 2026. OHL has taken this step due to the proximity of the amortization of its first batch of bonds, for 323 million, in March 2022.

In addition, OHL plans two capital increases for which it will attract between 42 and 71 million euros. The first shareholder of the company, the Amodio family, has agreed to invest 37 million. The other commitment, for 5 million, part of the fund Tyrus, a creditor of Grupo Villar Mir, the latter second OHL shareholder with 14%.

Changes in capital

After the recapitalization, the Amodio will rise from 16% to about 30% of the capital, while the bondholders will take 17% based on exchanging debt for shares, and the Villar Mir family could be diluted to around 9% if it does not go to enlargement. This operation, as well as the creation of three Newcos To house the companies that will guarantee the new bond, they must go through a shareholders’ meeting scheduled for the second half of March.

While OHL carries out this sanitation plan, the agencies Fitch and Moody’s lower their ratings to lows in case the company is not successful and must face the payment of short-term debt. Moody’s also says to take into account the write-off proposed to bondholders.

OHL’s management has been optimistic with the bondholders’ level of acceptance of its plan, which last week exceeded 60% of the creditor mass, and with the investment commitments announced by the Amodio and Tyrus.


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