As widely expected, Standard & Poor's has downgraded Globopar and TV Globo from "CC" to "D", a rating reserved for corporate debtors held to be in default. The decision reflected non-payment of some 3 million US Dollars in interest on a syndicated loan. The interest was due November 1. "Although non-payment of interest doesn?t legally constitute default until five days after the due date [i.e. November 6], it comes to the same thing according to our criteria,? said Milena Zamboni, S&P?s head of industry and infrastructure ratings in São Paulo. ?A debtor is unlikely to pay during the five-day grace period if it?s already missed the due date. Legal default triggers cross-default clauses for most of Globopar?s debt, configuring general delinquency for the entire group.? S&P?s announcement made no mention of the 10m USD due October 31, about which it had earlier issued a warning when it downgraded Globopar to "CC". According to the rating agency, Globopar?s total debt stands at about 1.2bn USD. This figure excludes its subsidiaries? debts, which amount to 410m USD. The rating will be reviewed again once Globopar reaches an agreement with creditors, restructures its debt and presents a new business plan.
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