Fitch downgrades CDL Hospitality

Fitch Ratings said it downgraded the long-term issuer default rating of CDL Hospitality Real Estate Investment Trust to BB+ from BBB-.

“The downgrade reflects the effect that the coronavirus pandemic is having on the global travel and lodging sectors, which has led to a sharp drop in HREIT’s cash flow due to an immediate plunge in travel. We expect the impact from the pandemic to be prolonged and do not forecast HREIT’s cash flow or credit metrics to return to pre-pandemic levels until at least 2024,” Fitch said in a press release.

The outlook is stable.

S&P cuts Federal Passenger

S&P said it downgraded Federal Passenger Co.’s issuer rating to BB+ from BBB-, reflecting a lowering of its stand-alone credit profile. The agency also removed the firm’s rating from CreditWatch with negative implications, where it was placed on May 8.

“Covid-19-related disruption will reduce FPC’s passenger turnover and revenue by about 50% in 2020. Without additional subsidies to partially compensate the drop in passenger turnover, our forecasts indicate that EBITDA and funds from operations (FFO) will be under significant pressure in 2020 before a pick-up in passenger levels fuels recovery,” S&P said in a press release.

The agency said it forecasts a slow recovery, with passenger turnover at 80% of 2019 level in 2021 and 90% in 2022.

“Additional state support, if made available, won’t fully mitigate the pressure on FPC’s credit metrics. The Russian government has until the end-2020 to approve the additional subsidies and pay the amount from the 2020 state budget,” S&P said.

The outlook is stable.

S&P pulls CAR from positive watch

S&P said it affirmed its CCC ratings on CAR Inc. and its senior unsecured notes and removed all the ratings from CreditWatch with positive implications. The agency placed them on positive watch on July 8.

The potential 20.86% stake acquisition by MBK Partners Fund IV could remove CAR’s shareholder overhang and improve its funding access, the agency said.

“MBK’s potential share purchase from UCAR Inc. could help unlock capital markets for CAR. CAR could have better access to funding once MBK completes the purchase of UCAR’s remaining shares of CAR. The replacement of UCAR with a new strategic shareholder could help improve CAR’s banking relationships and unfreeze its access to capital markets,” S&P said in a press release.

However, “CAR has no margin of error in liquidity management. CAR’s plan to service its $300 million (Chinese renminbi (RMB) 2.1 billion), Feb. 11, 2021, notes with cash from operations and used car disposals, while sufficient, could leave the company with very little cash buffer for its daily operations and repayment of RMB 750 million dim sum bonds due in April 4, 2021,” the agency said.

The outlook is positive.

Moody’s shifts CAR view to negative

Moody’s Investors Service said it shifted the outlook for CAR Inc. to negative from under review and confirmed the company’s Caa1 corporate family and senior unsecured ratings.

CAR reported the sale and purchase agreements signed in July between Jiangxi Province Jinggangshan Beiqi Investment Management Co., Ltd. and CAR’s shareholders, UCAR Inc. and Amber Gem Holdings Ltd., have been terminated and may not proceed, respectively.

“The rating confirmation reflects the fact that CAR’s high refinancing risk, which is exacerbated by its substantial shareholder UCAR’s negative impact on its funding access, remains because the transactions did not proceed,” said Gerwin Ho, a Moody’s vice president and senior credit officer, in a press release.

The negative outlook reflects that the weak operating environment and challenges at UCAR could weaken CAR’s funding access and financial profile, Moody’s said.

Moody’s changes Macrotech view to stable

Moody’s Investors Service said it changed the outlook for Macrotech Developers Ltd. to stable from negative and affirmed the company’s Caa1 corporate family rating. The agency also affirmed Lodha Developers International Ltd.’s dollar-denominated bonds guaranteed by Macrotech at Caa1.

“The ratings affirmation and change in outlook to stable reflect MDL’s improved liquidity position following (1) the refinancing of its construction loan for GSQ and (2) a gradual recovery in the company’s operating performance, which will result in higher earnings and cash flow,” said Sweta Patodia, a Moody’s analyst, in a press release.

Fitch assigns Aviva Singlife notes BBB-

Fitch Ratings said it assigned Aviva Singlife Holdings Pte. Ltd. a long-term issuer default rating of BBB+ with a stable outlook and a BBB- rating to its planned regulatory compliant tier 2 subordinated securities.

“ASH’s long-term IDR is derived from Fitch’s assessment of the insurer financial strength (IFS) rating of its proposed key operating entity, Aviva Singlife. ASH, a newly established holding company, will own 100% of the proposed Aviva Singlife, which will be formed from the merger of Singapore Life Pte. Ltd. and Aviva Ltd. The ratings are based on our expectation the merger will be completed, with all the required approvals from the various authorities, including regulatory and court, by 2021,” Fitch said in a press release.

Fitch said it rates the securities two notches below ASH’s IDR to reflect Fitch’s assumption of poor recovery prospects in the event of a default, given the subordination level.

The notes will have a tenor of 10.25 years and are callable after 5.25 years.

Net proceeds will be used for funding the acquisition and capital-adequacy purposes.

Moody’s gives Aviva Singlife notes Baa3

Moody’s Investors Service said it assigned a Baa3 rating to Aviva Singlife Holdings Pte. Ltd.’s planned subordinated notes. The agency also gave a Baa2 issuer rating to the company.

“The Baa3 rating of the subordinated dated securities reflects that the obligations will represent direct, unsecured and subordinated obligations of the issuer, and rank pari passu with all subordinated debt issued by the issuer that qualifies as tier 2 capital securities and other parity obligations,” Moody’s said in a press release.

The company intends the planned notes to qualify as regulatory tier 2 capital of the group. “Therefore, the rating is one notch below ASH’s issuer rating of Baa2, reflecting the subordination of subordinated creditors to senior creditors,” Moody’s said.

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