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.

The Reston, Virginia-based company said in an Aug. 11 earnings report that it received waivers on certain financial facilities until the end of the year, at which time the holders of NII's senior notes can declare a default and demand repayment if the waivers aren't extended. NII has been losing customers as it fell behind America Movil SAB and Telefonica SA in offering faster download speeds for smartphones.

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