OREANDA-NEWS. Fitch Ratings has downgraded Spanish engineering and construction group Grupo Isolux Corsan, S. A.'s (Isolux) Long - and Short-Term Issuer Default Ratings (IDR) to 'RD' (Restricted Default) from 'C'. Isolux's senior unsecured debt rating and the guaranteed notes of Grupo Isolux Corsan Finance B. V are affirmed at 'C' with a Recovery Rating of 'RR5'.

The downgrade of the IDR reflects the execution of a Distressed Debt Exchange (DDE), according to Fitch's criteria, following recent filings for forms of court protection. The company has confirmed that, to date, it has met payments but non-payments are planned under restructuring plans. Group entities are still operating, albeit with liquidity and other financial constraints.

Isolux published its "Terms of Restructuring" on 15 July 2016. In its recent "Update on Restructure Progress" the company confirmed that Grupo Isolux Corsan Finance B. V filed for a suspension of payments proceedings in Amsterdam, and obtained a preliminary suspension of payments on 28 July. Isolux also filed a petition for homologacion of a refinancing agreement in the mercantile court of Madrid. On 29 July, group entities filed cases under Chapter 15 of Title 11 of the US Code. These forms of court protection illustrate mechanisms to facilitate the group's debt restructuring, as agreed with relevant creditors.

RATING SENSITIVITIES

Positive: Future developments that may, individually or collectively, lead to positive rating action include:

-Sustainability of the company's operating and financial profiles post - debt restructuring

Negative: Future developments that may, individually or collectively, lead to negative rating action include:

-Bankruptcy or other forms of winding-up, or a cessation of business, which would result in a 'D' rating.

FULL LIST OF RATING ACTIONS

Grupo Isolux Corsan, S. A.

--Long-term IDR downgraded to 'RD' from 'C'

--Senior unsecured debt rating affirmed at 'C'/'RR5'

--Short-term IDR downgraded to 'RD' from 'C'

Grupo Isolux Corsan Finance, B. V.

--Senior unsecured debt rating affirmed at 'C'/'RR5'