The construction company is currently running three major projects in Panama: the urban renovation of Colon, with a value of $537 million, the construction of Metro Line 2, for $1.8 billion, and the expansion of Tocumen International Airport. 

See: "Former President of Odebrecht Convicted"

A statement from the rating agency notes that "...The downgrade reflects Moody's perception of increased credit risk for OEC, due to the company's deteriorated liquidity profile up to June 2016 and business uncertainties amid evolving reputational risks. The Caa1 rating considers a low likelihood that OEC's internal cash generation and financial profile will significantly recover over the next 12 months as per the challenging environment for infrastructure investments in Latin America and for the company, in particular, along with potential contingent liabilities." 

See statement by Moody's.

More on this topic

Costa Rica: Political and Fiscal Uncertainty Take Its Toll

June 2020

Standard & Poor's downgraded the foreign debt rating from B+ to B with a negative outlook, arguing that there is uncertainty due to the lack of flexibility of the Alvarado administration in implementing fiscal policy in the country.

The negative perspective in the new risk note, anticipates that there is a possibility that in the next 12 months the rating will be degraded again, if the authorities adopt policies that damage the country's financial profile.

The Aftermath of the Odebrecht Case

May 2017

Moody's estimates lower economic growth in Panama in the short term, due to the potential negative impact of the delay in investments and the possible cancellation of large projects awarded to the Brazilian construction company.

Although the controversial Brazilian company, accused of having developed a worldwide corruption network, had interests in several Latin American countries, it was in Panama that a large number of its projects were concentrated, ranging from the urban renewal of Colón, currently under development and with a estimated value of $500 million, to the contract to build the hydroelectric station Chan II, estimated at $1 billion and recently canceled by the Varela administration.

Odebrecht Downrated Again

January 2017

Fitch Ratings has downgraded Brazilian construction firm from B- to CC, arguing that the revelations about bribes "have exacerbated its reputational risk".

From a press release by Fitch Ratings:

Fitch Ratings-Sao Paulo-17 January 2017: This is a correction of a release published Jan. 17, 2017. It corrects the rating for the USD800 million senior unsecured notes due 2023.

S & P Downgrades Odebrecht

April 2016

Confirmation of the decline in the financial capacity of the construction company has strengthened arguments by those calling for the revision of their contracts and that the firm not be awarded others.

From a statement issued by Standard & Poor's:


SAO PAULO (Standard & Poor's) March 29, 2016--Standard & Poor's Ratings Services lowered its global scale corporate credit rating on Odebrecht Engenharia e Construção S.A.