Moody’s cuts Real People to Caa2/Caa2.za

Moody's Investors Service said it downgraded Real People Investment Holdings Ltd.’s global scale issuer rating to Caa2 from B3 and its national scale issuer rating to Caa2.za from B3.za.

The outlook on the long-term global scale issuer rating is negative.

Concurrently, the agency affirmed Real People's short-term global scale and national scale issuer ratings at NP and NP.za.

Moody’s said the downgrade reflects: (a) Recurring bottom-line losses that place pressure on Real People's Basel II capital adequacy ratio (CAR) of 31.6% as of December 2016, which is very close to the 30% minimum debt covenant level specified in its bond documentation; and (b) heightened funding and liquidity challenges, particularly in regards to raising new funding that will allow the company to meet maturing liabilities and finance business growth and lending.

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