RioPrevidencia bonds collapse on acceleration concerns

viernes 25 de septiembre de 2015 15:15 GYT
 

By Paul Kilby

NEW YORK, Sept 25 (IFR) - Bonds of RioPrevidencia, the state of Rio de Janeiro's public pension funds, were collapsing on Friday following reports that it had breached covenants on its dollar bonds.

The 2024s were down about 6.5 points on the day to be quoted at 64.50, according to Trace.

Forward-looking debt service coverage ratios for the fourth quarter stand at 1.3x, coming in below minimum covenant requirements, according to a BNP report sent to investors.

This could trigger an acceleration on the notes if the majority of holders declare this an event of default, the bank said.

The bonds are backed by oil royalties on concessionaires primarily operated by Petrobras, the state-owned oil company at the center of a widening corruption scandal.

The borrower raised US$3.1bn in the international capital markets in 2014 through the sale of a 6.75% 2027 and a 6.2% 2024s. Banco do Brasil and BNP Paribas acted as leads on both offerings. (Reporting By Paul Kilby; Editing by Jack Doran)