On July 14, 2015, Standard & Poor’s Ratings Services lowered its corporate credit rating on Tonon Bioenergia S.A. to SD from CC and its $300 million senior unsecured notes to D from C. According to Standard & Poor’s, the downgrade follows Tonon’s recent announcement that more than 95% of its noteholders approved the proposal for exchanging the amount of the $300 million corresponding to their share for new senior unsecured notes. According to Moody’s criteria, this is viewed as a distressed exchange, especially because noteholders will receive less than originally expected.
On July 16, 2015, Fitch Ratings downgraded Tonon Bioenergia S.A’s foreign and local currency Issuer Default Ratings to RD from C and affirmed at C the ratings on its $300 million senior unsecured notes due 2020 and the $230 million senior secured notes due 2024 issued by Tonon’s fully-owned subsidiary Tonon Luxembourg S.A. According to Fitch, the downgrade follows the conclusion of the debt exchange offer for the $300 million senior unsecured notes due 2020, with approximately 95% adhesion. For more on distressed companies.