Brazilian infrastructure company Invepar will likely struggle to repay holders of its 2026 debentures should the federal Supreme Court decide not to weigh in on a legal dispute with the Rio de Janeiro city government over the expropriation of a toll road concession, according to S&P Global Ratings.
The supreme court must decide whether it has authority to analyze the case, which stems from the termination of Invepar’s concession to operate the Linha Amarela toll road in Rio de Janeiro, the ratings agency said Friday in a report.
The BRL 360 million outstanding on the company’s debentures maturing in 2026 has an early prepayment clause in case Invepar loses any of its concessions. Should the supreme court decide throw the case out, it would trigger the prepayment clause and negatively impact the firm’s revenues, according to S&P.
“Under this scenario, we anticipate that Invepar wouldn’t be able to pay its debentures,” the ratings agency said.
Both the Superior Court of Justice and the Rio city council previously issued rulings against Invepar.
S&P cut the company’s credit rating to CCC from CCC+, citing its decision to seek temporary waivers from creditors after announcing in August it would no longer operate the Via 040 toll road.
The rating could be downgraded again if creditors don’t grant the waiver in the next few weeks, the agency added.