Fitch lowers Lodha, notes to B

Fitch Ratings said it downgraded Lodha Developers Private Ltd.’s long-term issuer default rating to B from B+.

The outlook is negative.

The agency also downgraded the long-term rating on Lodha's $200 million senior unsecured notes due in 2020 to B from B+. The recovery rating is RR4.

The dollar-denominated notes are issued by Lodha Developers International Ltd., and guaranteed by Lodha and some of its subsidiaries.

Fitch said the downgrade reflects Lodha's inability to reduce its leverage, as measured by net debt/adjusted inventory, to a level appropriate for its previous rating.

Leverage had increased to 80% by Dec. 31, 2015 from 76% at March 31, 2015 (FYE15) and 65% at FYE14, as the company continued to ramp up the pace of construction in its property projects in spite of lower-than-expected presales and cash collections over the last 12 to 18 months.

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