After CEO Splits, Bond Traders Brace for a Big Default in Brazil
- Company has 231 million euros of bonds due next month
- Gontijo is the second Oi CEO to resign in less than two years
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Bond investors in Oi SA are preparing for the worst after Chief Executive Officer Bayard Gontijo unexpectedly quit in the middle of talks to restructure some of the phone operator’s more than $14 billion of debt.
Oi’s $1.8 billion in notes due in 2020 have plunged to a record low of 21.8 cents on the dollar in the wake of the resignation. The level signals bondholders have little confidence the company will be able to honor its debt, including 231 million euros ($261 million) of notes due next month.