Fitch rates Lodha notes B+

Fitch Ratings said it assigned a final rating of B+ to Lodha Developers Private Ltd.’s $200 million 12% senior unsecured notes due March 13, 2020 with a recovery rating of RR4.

The rating follows the receipt of documents conforming to information already received, Fitch said, and is in line with the expected rating assigned March 4.

The notes were issued by Lodha Developers International Ltd. (Lodha Mauritius), which is a wholly owned subsidiary of Lodha. The notes are unconditionally and irrevocably guaranteed by Lodha and its key subsidiaries.

Therefore, the notes are rated at the same level as Lodha’s long-term issuer default rating of B+.

The ratings reflect the company’s de-leveraging slower than expected, Fitch said.

Leverage has increased from 77% at the end of fiscal 2014 because of expected land purchases and investments in its overseas ventures, as well as slower-than-expected cash collection from contracted sales, the agency said.

Fitch said it currently expects leverage to remain high at about 65% at the end of 2016, and reduce thereafter to less than 55%.

But any unanticipated land purchases over the next 18 months or any other factor that may impede Lodha’s de-leveraging progress could result in negative rating action, Fitch said.

© 2015 Prospect News.
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