Fitch downgrades Cyrela

Fitch Ratings said it downgraded the foreign-currency and local-currency issuer default ratings of Cyrela Commercial Properties SA Empreendimentos e Participacoes to B+ from BB.

The agency also said it downgraded the company’s national scale long-term rating to A-(bra) from AA-(bra).

The outlook is negative.

The downgrades reflect the company’s weaker cash-flow generation, pressured by highly unfavorable macroeconomic conditions and increased operational cash burn due to higher financial expenses, Fitch said.

Net leverage is high and should remain at more than 7x at least in the next two years, the agency said.

The company’s liquidity is satisfactory, but Fitch said it expects higher cash burn in 2016 and 2017, Fitch said.

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