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Brazilian fertilizer company Unigel has proposed to halt all offshore bond payments for two years to avoid a default, as per a source. If an agreement is not reached, Unigel could ask for temporary court protection against creditors, the source added. The issue concerns Unigel’s missed $23.2mn coupon payment that expires on November 1 wherein, the company is in the middle of a 30-day grace period. The bond in question is its 8.75% notes due 2026 that currently trades at 35.2 cents on the dollar. Unigel is also said to be proposing a swap of global bonds for new bonds to be paid in 10 years with installments, the source noted. To add to its woes, the distressed company has postponed the publication of its Q2 results where it has likely breached a covenant on its local bonds given operating issues.
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