Abengoa SA bonds were valued at less than five cents on the euro in an auction to settle credit-default swaps, signaling that investors have little confidence in the Spanish renewable-energy company’s future.

Traders set a final value of 4.625 percent of face value in an auction administered by Markit Group Ltd. and Creditex Group Inc. It means sellers of default swaps will have to pay as much as $580 million to settle contracts tied to the Seville-based company’s debt, based on Bloomberg calculations.

“The level indicates that the market doesn’t expect Abengoa to survive,” said Maxime Kogge, a credit analyst at Spread Research in Lyon, France. Investors are “forecasting a full write-off on the bonds,” he said.

Abengoa swaps are being settled after the company missed commercial-paper payments, as it struggled under a debt-pile built up during a global expansion drive. The company, which has 8.9 billion euros ($9.7 billion) of gross borrowings, is trying to negotiate a debt restructuring after filing for preliminary creditor protection in November.

Sellers of protection will pay buyers face value in exchange for the underlying securities or the cash equivalent set at the auction. There were 2,264 default swap contracts covering a net $608 million of Abengoa debt as of Jan. 8, according to Depository Trust & Clearing Corp. Only contracts using 2014 definitions were included in the auction following a ruling by the International Swaps & Derivatives Association.

The 375 million euros of bonds issued by Abengoa last year are quoted at 13 cents on the euro, according to data compiled by Bloomberg.

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