Fitch Ratings has downgraded Maldives-based urban developer Housing Development Corporation Ltd's (HDC) Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings to 'CCC' from 'B'.
The statement released by Fitch reads that Fitch has revised HDC's Stand-Alone Credit Profile (SCP) to 'ccc' from 'b' following the assessment of the company's 'Weak' revenue defensibility, 'Midrange' operating risk and 'Weak' financial profile are unchanged. The revised SCP reflects the rising external liquidity pressures of the government may negatively affect the company's future financing.
The statement also reflects that Fitch believes HDC will continue to receive strong government support.
Further, in the statement Fitch highlighted that the Maldives government provides HDC with strong financial support, mainly in the form of funding support and guarantees on international unsecured borrowings; the MoF funded 22% of HDC's debt and guaranteed 73% at end-2019.
As per Fitch, HDC's ratings are equalized with those of Maldives due to its significant linkage and strategic importance to the government, reflected by an overall support score of 50 under the Government-Related Entities Rating Criteria of Fitch.
The statement released by Fitch reads that Fitch has revised HDC's Stand-Alone Credit Profile (SCP) to 'ccc' from 'b' following the assessment of the company's 'Weak' revenue defensibility, 'Midrange' operating risk and 'Weak' financial profile are unchanged. The revised SCP reflects the rising external liquidity pressures of the government may negatively affect the company's future financing.
The statement also reflects that Fitch believes HDC will continue to receive strong government support.
Further, in the statement Fitch highlighted that the Maldives government provides HDC with strong financial support, mainly in the form of funding support and guarantees on international unsecured borrowings; the MoF funded 22% of HDC's debt and guaranteed 73% at end-2019.
As per Fitch, HDC's ratings are equalized with those of Maldives due to its significant linkage and strategic importance to the government, reflected by an overall support score of 50 under the Government-Related Entities Rating Criteria of Fitch.
