Fitch downgrades Global Cloud

Fitch Ratings said it downgraded Global Cloud Xchange Ltd.'s long-term foreign- and local-currency issuer default ratings to CC from CCC.

Fitch also said it downgraded the rating on GCX Ltd.'s $350 million 7% senior secured notes due 2019 to CCC from B- with a recovery rating of RR2.

The downgrades reflect a view of very high levels of credit risk regarding refinancing of the secured notes, given GCX's poor access to capital markets and due to default and break-up of its parent, Reliance Communications Ltd., Fitch explained.

The agency said it believes that default looks probable in light of significant uncertainties about the willingness of investors to lend new debt to GCX amid legal and other procedural delays.

The notes are secured by the assets and equity interests of GCX and its key subsidiaries and are guaranteed by GCX and its key operating subsidiaries, which generate most of the group's revenue and EBITDA, Fitch noted.

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