The Fitch Oi Rating Falls to the Bottom and Is Withdrawn After a Decade of Selling Itself Off
BRAZIL · TELECOMS
Key Facts
- —The company Oi, which once ran fixed-line telephones across most of Brazil.
- —What happened A Rio court declared it bankrupt in August, ending a three-year rescue attempt.
- —Monday Fitch cut its rating to the bottom of the scale, then stopped rating it at all.
- —Why it stopped The agency says it cannot estimate what creditors will recover.
- —The reason for that Oi’s last published accounts date from June 2025, more than a year ago.
- —The catch The fibre business it sold on the way down is shielded from creditors by the same ruling.
A company can keep operating for years by selling the parts of itself that make money. Eventually it runs out of parts.
For a decade Oi stayed alive by selling pieces of itself. That is the story behind Monday’s Fitch Oi rating decision.
The fibre network went to a partner, then the towers and the data centres. Each sale bought another year.
Each sale also removed a source of revenue. On Monday the last external observer stopped watching altogether.
What Fitch Did
The Fitch Oi rating moved from restricted default to full default, in both foreign and local currency. The agency then withdrew every rating it had on the company.
That included the bonds due in 2027 and 2028. Its stated reason is that it no longer has enough information to estimate what creditors might recover.
The gap is specific. Oi’s most recent consolidated accounts date from 30 June 2025.
One nuance is worth keeping straight. Oi was already rated in default before Monday, so this is a move from one default category to a lower one.
Restricted default means a company has failed on some obligations while continuing to trade. Full default is what happens when the trading stops being the point.
The Bankruptcy That Took Two Attempts
A first-instance judge in Rio de Janeiro declared Oi bankrupt in November 2025. Her reasoning was blunt for a court document.
The company, she wrote, was maintaining its activities anomalously, sustained by asset sales and borrowing rather than by its own operations. She also cited evidence of mismanagement and asset depletion.
Two large creditor banks appealed and the decree was suspended. For nine months Oi existed in a legal pause.
On 25 August 2026 an appeal chamber rejected both appeals unanimously. The bankruptcy was restored and the rescue formally closed.
A lawyer was appointed to administer the liquidation. What happened, in the end, is that a second judicial recovery turned into a wind-up.
Who Is Owed What
Debt is put at more than 44bn reais, about US$8.6bn. Negative equity as of March 2026 exceeded 22.6bn reais, roughly US$4.4bn.
There are approximately 164,000 creditors. Five large Brazilian banks are owed around 4bn reais on guarantees alone, about US$780m.
Suppliers are owed about 1.7bn reais, some US$330m. Those numbers will shape how long the liquidation runs.
Brazilian bankruptcies of this size are measured in years, not months. Few of those creditors expect to be made whole.
The Part the Court Protected
The appeal chamber did something creditors will have read carefully. It preserved the asset sales and guarantees executed during the second rescue.
That explicitly shields the transfer of the fibre business to V.tal, which now trades as the broadband operator Nio. Those assets cannot be clawed back.
Labour claims and liability actions are unaffected and proceed on their own track. The regulator says the decision assured continued provision of essential services during a transition.
Millions of Brazilians still get a telephone line or an internet connection from what remains. Keeping those working is the court’s first problem, not the creditors’ recovery.
How a National Champion Ends
Oi was the incumbent fixed-line operator across most of Brazil. Its first judicial recovery was among the largest ever filed in the country.
That process concluded in December 2022. A second one was filed in March 2023, barely three months later.
The years in between were a sequence of disposals. Mobile to Claro, TIM and Vivo; fibre to V.tal; towers and data centres to whoever would buy them.
What was left was a shrinking company carrying a debt stack built for a much larger one. The judge’s phrase about sustaining activities through asset sales describes that pattern exactly.
For bondholders, recovery estimates now come from the liquidation rather than from any rating. Most institutions wrote the position down long before Monday.
More: Latin American business and markets, every day from The Rio Times.
Frequently Asked Questions
What did Fitch do to Oi?
It cut the long-term issuer ratings to full default from restricted default, then withdrew all ratings including the 2027 and 2028 bonds.
Why withdraw the ratings?
The agency says it lacks sufficient information to estimate recovery prospects. Oi’s most recent consolidated accounts date from 30 June 2025.
Is Oi bankrupt?
Yes. A Rio de Janeiro judge declared bankruptcy in November 2025, the decree was suspended on appeal, and an appeal chamber unanimously restored it on 25 August 2026.
How much is owed?
More than 44bn reais, about US$8.6bn, across roughly 164,000 creditors. Five large banks are owed around 4bn reais on guarantees, about US$780m, and suppliers about 1.7bn reais, some US$330m.
Do Oi’s customers lose service?
Not immediately. The regulator says the court decision assured continued provision of essential services during a transition, with operational continuity authorised for connectivity.
Sources: Money Times and BPMoney of 14 September, Migalhas, TELETIME, Poder360 and Anatel.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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