Fitch cuts Rio Energy, notes

Fitch Ratings said it downgraded Rio Energy SA, UGEN SA and Uensa SA's long-term foreign currency issuer default ratings to B- from B and downgraded the local currency issuer default ratings to B- from B+.

The foreign currency issuer default rating was placed on rating watch negative, and the local currency issuer default rating's rating watch negative was maintained.

The agency also downgraded the co-issued Rio Energy, UGEN and Uensa senior secured notes due 2025 to B-/RR4 and placed it on rating watch negative.

Fitch said the ratings reflect a weaker liquidity profile and higher than expected debt profile coupled with the recent news of its former chairman and minority shareholder’s involvement in the federal graft investigation.

As a result, access to funding could be compromised and liquidity pressured as the company has commenced its expansion plans to add an additional 300MW by first-half 2020, the agency said.

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