Moody’s lowers PDG, debt to Caa3

Moody's America Latina said it downgraded PDG Realty SA Empreendimentos e Participacoes’ corporate family rating to Caa3 on the global scale and to Caa3.br on the Brazilian national scale from B3 and B1.br, respectively.

At the same time, the agency downgraded the R$250 million senior secured bank credit notes to Caa3/Caa3.br from B3/B1.br, while the company's R$140 million senior unsecured debentures (seventh issuance) were downgraded to Ca/Ca.br from Caa1/Caa1.br.

The outlook remains negative.

The downgrade was prompted by Moody's perception of increased credit risk following PDG's announcement that it started a debt restructuring process, which will include the renegotiation of several of its contractual arrangements. These events portend material changes in the company's debt structure that could result in high-expected losses for the existing secured and unsecured creditors.

The agency believes, however, that PDG remains fully committed to finding a solution to its unsustainable capital structure and is vigorously pursuing options to improve liquidity.

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