Powerlong was downgraded to Caa2 from Caa1 by Moody’s with its senior unsecured ratings cut to Caa3 from Caa2. This comes on the back of “heightened liquidity risk” after its proposed exchange offer and consent solicitation for its dollar bonds due in July 2022 and November 2022. The offer indicates liquidity stress, ” tight funding conditions and the company’s large debt maturities” with $600mn in offshore bonds due by end-2022. The developer will find it difficult to raise new funds in debt capital markets, both onshore and offshore, further exacerbating its weak liquidity. While its investment property portfolio could provide alternate liquidity, this is subject to market conditions.
Powerlong’s dollar bonds are down over 1 point to trade at 13-16 cents on the dollar.