OREANDA-NEWS. There is a greater than 50% probability that Construtora Norberto Odebrecht S.A. (CNO) will maintain its investment grade rating despite the ongoing Lava-Jato investigation involving Petrobras' contracting practices, according to the latest report in Fitch Ratings' 10 report series Top 10 Most-Actively Traded LatAm Corporates.

One report in the series will be released each day through Feb. 13 per the schedule found at the bottom of this release.

'CNO has strong geographic diversification and a liquidity cushion thick enough to weather the storm and pay fines, which could be substantial,' said Alexandre Garcia, Associate Director. 'But a public project ban remains a risk.'

Fitch could downgrade CNO by one or two notches if it is banned from participating in domestic public projects. The reputational damage could affect the company's credit profile beyond its modest 3% backlog exposure to Brazilian public clients.

Other clients in Brazil or in countries with strong anticorruption laws, such as the U.S., could penalize CNO and restrict its activities in those markets. Brazil has a precedent of punishing companies for corrupt practices.

Fitch could downgrade CNO's ratings if the company is forced to pay heavy fines as part of an agreement with authorities. Fines could be enough for a one-notch downgrade, but would likely not push the company out of investment grade.

Fitch would expect the federal government to allow fines to be paid in installments in order to maintain working capital liquidity in the sector.

CNO's credit quality could be affected if oil prices remain at low levels for a prolonged period. The company has 42% of its backlog coming from Venezuela and Angola, two countries that are highly dependent on oil exports.

Fitch's Top 10 Most-Actively Traded LatAm Corporates series will be released one report per day as follows:

Feb. 2: Oi Scenario Analysis - Asset Sales and Industry Consolidation are Key to Credit Profile Recovery
Feb. 3: Cemex Scenario Analysis - Road to Investment Grade Runs through the U.S.
Feb. 4: Ecopetrol Price and FX Sensitivity Analysis - Rating Linkage with Sovereign Could Weaken
Feb. 5: America Movil Scenario Analysis - No Separation Anxiety
Feb. 6: Vale Scenario Analysis - Ratings Rock Solid Despite Industry Softness
Feb. 9: Pacific Rubiales Scenario Analysis - Preserving Liquidity Depletes Reserves
Feb. 10: PDVSA - Something's Gotta Give
Feb. 11: Cencosud Scenario Analysis - What Factors Could Stabilize the Company's 'BBB-' Rating
Feb. 12: Construtora Norberto Odebrecht Scenario Analysis - Could CNO Lose its Investment Grade Rating due to Lava Jato Scandal?
Feb. 13: Petrobras - A Political Labyrinth

For more information, a special report titled 'Construtora Norberto Odebrecht S.A.' is available on the Fitch Ratings web site at www.fitchratings.com.