The earlier B3 rating was itself a downgrade, by Moody's this August, and indicating hightened credit risk.
Global
rating firm Moody's
Investors Service has downgraded the corporate family rating
(CFR) of Macrotech Developers (earlier known as Lodha) to Caa1, from
B3. A rating of Caa1 is given to entities with high credit risk.
The
earlier B3 rating was itself a downgrade, by Moody's this August, and
indicating hightened credit risk. On Tuesday, Moody's also downgraded
the backed senior unsecured rating of the dollar-denominated bonds
issued by Lodha Developers International and guaranteed by Macrotech,
to Caa1 from B3.
"The
downgrade to Caa1 reflects continued uncertainty with respect to the
refinancing of Macrotech's upcoming debt maturities," says Sweta
Patodia, a Moody's analyst. "While the company has made some
progress in its refinancing efforts, its measures to date do not
completely alleviate the significant refinancing risks." She is
also Moody's lead analyst for Macrotech. MDL now has in place an
executed loan agreement for $155 million, secured against the unsold
inventory at Lincoln Square, one of its London projects. However,
drawdowns under this facility remain subject to receiving the
practical completion certificate for all units at the property,
expected by next month.
The
management estimates that practical completion certificates have come
for about 75 per cent of the units in the development, Moody's said.
Macrotech
expects to secure another credit facility of around $195 mn against
the unsold inventory at Grosvenor Square, its second London project.
Documentation for this facility is in progress and likely to be
completed over the next few weeks, it said. "These two
facilities constitute the company's primary source to refinance the
upcoming bonds. However, given that the facilities cannot be drawn
down immediately, and remain subject to the fulfilment of certain
conditions, liquidity risk remains elevated," says Moody's.
In
addition, the company plans to set up a rupee-denominated facility,
to be secured against the inventory at its Indian operations.
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