Moody's downgrades Gafisa

Moody's Investors Service said downgraded Gafisa SA's corporate family ratings and senior secured ratings to Caa1 and Caa1.br from B3 and B2.br, respectively.

The outlook remains negative.

The downgrades reflect an expectation that the turnaround in Gafisa's operating performance may take longer than anticipated, Moody's said.

The company will face execution risks during the implementation of its new business strategy, which increases the likelihood of additional debt restructuring in the short term, the agency said.

Gafisa will continue to post weak credit metrics in the near term, Moody's added.

The company is expected to remain smaller and have a narrower product and geographic concentration than historical levels, the agency said.

Gafisa recently announced a new business strategy to reduce costs, implement asset sales and create innovative solutions for customers.

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