OREANDA-NEWS. S&P Global Ratings lowered its global scale corporate credit rating on Usina Caete S. A.- NE to 'D' from 'CCC-' and our Brazil national scale corporate credit rating to 'D' from 'brCCC-'. At the same time, we lowered the issue-level ratings to 'D' from 'CCC' and our national scale issue-level rating to 'D' from 'brCCC'. The recovery rating of '2' on Caete's senior secured debt remains unchanged, indicating substantial recovery prospects (70%-90% in the high range of the band).

We also removed the ratings from CreditWatch negative.

The downgrade follows the company's missed interest and principal payment on July 29, 2016, on its secured debenture term loan and other secured debt, accounting for nearly all of the company's debt. We do not expect the company to make the payments within the next five business days or other stated grace period. It will instead go through a debt restructuring

We will reassess our ratings on Usina Caete after it's able to negotiate the terms with its creditors and adjust its capital structure.

Our recovery rating of '2' remains unchanged. For a full recovery analysis, please see "Usina Caete S. A. - NE Downgraded To 'CCC-' From 'B-' And Placed On CreditWatch Negative On Greater Liquidity Pressures," June 27, 2016.