Bonds issued by Brazil’s Odebrecht plummeted on Tuesday after it delayed the release of financial results amid questions about the impact of a corruption probe on its books.
One New York-based trader described “panic” selling among holders of the company’s debt, noting that news of the postponed results was “unexpected.”
The 7.125% 2042s and the 4.375% 2025s sunk about 4.5 points on Tuesday to close respectively at 31.25-32.75 and 30.25-31.75, putting them well into distressed territory.
The construction conglomerate told bondholders about the postponed results after auditors requested further information about the accounting implications from the so-called Car Wash bribery scandal, Reuters reported on Tuesday.
The news prompted Fitch on Tuesday to downgrade about US$1.3bn of bonds issued by Odebrecht Finance to B+ from BB.