NII’s Woes Could Bring $3 Billion Bond Meltdown

The telecom has warned it’s likely to file for bankruptcy.

The bonds of NII Holdings Inc. are poised to lose as much as $3 billion in value after the mobile-phone carrier operating under the Nextel brand in Latin America said it will probably file for bankruptcy protection.

Recovery rates for creditors of NII, which has $5.8 billion in debt, may be as little as 20 percent, according to Moody’s Investors Service. Aurelius Capital Management, the distressed-debt investor that’s battling the government of Argentina and is also an NII creditor, claimed the company is already in default as it faces $119 million in interest payments due Aug. 15.

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