Cap Wants to Renegotiate Covenants

Chile steelmaker Cap will meet with bondholders on August 28 to negotiate changes to its bond covenants. Santander, the company’s advisor, says in a letter to the local stock exchange that it will seek changes to the company’s capital requirements as outlined in the bond indentures. In July, S&P placed the company’s BBB minus rating on credit watch negative, saying it expects significant deterioration in its financial risk profile. “We expect that weaker cashflow generation and financial ratios could potentially reduce the company’s high cash position of $381m as of March 31,” S&P says. Separately, Cap said earlier this week it has been approached by Mitsubishi, one of its partners, which is interested in acquiring a stake in iron ore producer Minera del Pacifico.