Odebrecht misses interest payment on perpetual notes

Odebrecht Oil and Gas (OOG) missed a US$9.6 million interest payment due on its 7% unsecured perpetual notes on March 17, exercising its right to a 30-day grace period, according to Reuters.

Odebrecht Offshore Drilling (OOD), a subsidiary of Odebrecht Oil and Gas, is negotiating with holders of its secured 2022s amid fears that a full default is on the cards. Reuters noted that OOD entered a forbearance agreement with 2022 holders in 2015 after the charter and servicing agreements for one of the drilling vessels that back the bonds were canceled by Petrobras.

OOD also renewed the letters of credit that were part of the notes' collateral package for another 60 days starting on Feb. 24. The forbearance agreement has avoided a debt acceleration, but analysts think the company will struggle to find a new charter for the drilling vessel in what remains a challenging environment for the oil sector.

On March 17, the company stated that, during the grace period, OOG will continue to engage in discussions with its stakeholders and analyze solutions in order to strengthen its financial position in the currently challenging market environment of the oil and gas sector.

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