Fitch affirms Global Cloud Xchange, notes

Fitch Ratings said it affirmed Global Cloud Xchange Ltd.’s long-term foreign- and local-currency issuer default ratings at CCC.

The agency also affirmed the company's $350 million 7% senior secured notes due 2019, issued by subsidiary, GCX Ltd., at B- with a recovery rating of RR2.

Fitch said the affirmation reflects high refinancing risk on the secured notes due to continued weak liquidity and persistently negative free cash flow (FCF) as well as the default and break-up of Global Cloud Xchange’s parent, Reliance Communications Ltd., which has dented the group's reputation.

Global Cloud Xchange may face challenges to refinance the notes – which have a current yield to maturity of around 16%-17% – in a timely manner.

The agency said it expects to review the ratings again by the end of September.

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