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Unigel Debt Sinks Into Distressed Amid Covenant Breach Concerns

  • Rising leverage could lead to breach of local-debt covenant
  • Management cut capex plan seeking to boost financial strength
Unigel's Dollar Bonds Crater | Notes due in 2026 have slumped amid covenant-breach concerns

Bonds of Unigel slipped into distressed territory on concern that poor results may put the chemical maker at risk of covenant violations. 

Dollar notes due in 2026 are down 34 cents since the firm posted its first-quarter earnings earlier this month, seen as weak by analysts. The plunge — the worst among Latin America’s corporate borrowers this quarter, according to data compiled by Bloomberg — sent yields jumping to more than 35%, from around 8% in January.