Fitch downgrades Tahoe

Fitch Ratings said it downgraded Tahoe Group Co., Ltd.'s long-term foreign-currency issuer default rating to B- from B.

The outlook is negative.

Fitch also said it downgraded the senior unsecured rating to CCC+ from B- with a recovery rating of RR5.

The ratings reflect a belief that Tahoe's leverage will remain higher than 70% for the next 18- to 24-months, the agency said.

The ratings are constrained by the company's persistently high leverage, which is driven by aggressive land acquisitions before 2018, Fitch said.

The company financed the acquisitions via debt, which also resulted in a heavy interest burden that severely weakened its ability to generate operating cash flow, the agency said.

The negative outlook considers the heightened liquidity risk from its poor cash collection performance, Fitch added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.