Lupatech Gets Consent to Alter Covenants

Creditors of Brazil’s Lupatech have agreed to adjust the payment schedule for the troubled oil valve maker’s BRL320m ($204m) in convertible 2018 bonds, as well as amend the remuneration and the conversion premium. Facing tight liquidity and high leverage coming out of the credit crisis period, Lupatech got a covenant waiver from creditors in 2010 that expired this year. An agreement to adjust the terms was largely in the hands of Brazilian development bank BNDES, which holds about 90% of the converts issued in 2009, as well as 11.4% of Lupatech’s equity. Lupatech’s has seen its rating fall to Caa1 and CCC, on concerns about the sustainability of its cash flow and liquidity, and has said it may look to sell non-core assets to raise funds.