Andrade Gutierrez Drops as Brazil Watchdog Widens Carwash Probe

Andrade Gutierrez Drops as Brazil Watchdog Widens Carwash Probe

by Julia Leite
1:05 PM BRT
March 12, 2015

(Bloomberg) — Bonds of Andrade Gutierrez SA slipped the most in two weeks as the builder was included in a list of companies being investigated in Brazil’s largest-ever corruption probe.
Andrade’s $500 million of notes due 2018 fell 2.1 cents to 74.16 cents on the dollar at 11:48 a.m. in New York. The bonds are down 23 cents since the November arrests of more than 20 people as part of an inquiry into whether builders formed a cartel and paid bribes to win contracts at state-controlled oil company Petroleo Brasileiro SA.
Brazil’s comptroller general, known as CGU, said in an e-mailed statement March 11 that it was investigating 10 companies including Andrade as part of the so-called Carwash probe. Moody’s Investors Service said Thursday that the move has a negative impact because of potential penalties, fines and limitations on bidding in public auctions. Moody’s cut Andrade in January to Ba2, or two levels below investment grade.
“The companies under investigation also risk reputational damage and weakening investor sentiment, reducing their access to funding from public and private capital markets, developing banks and multilateral financing agencies,” Moody’s analysts Cristiane Spercel and Marianna Waltz wrote in a report.
While Moody’s has a negative outlook on Andrade, the inclusion in CGU’s list has no impact on the rating at this time, according to the Moody’s report.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Powered by

Up ↑

%d bloggers like this: