Moody’s cuts AFE

Moody's Investors Service said it downgraded AFE SA Sicav-Raif's corporate family rating to B3 from B2 and backed senior secured debt rating to Caa1 from B3. Moody's also placed all AFE's ratings on review for downgrade. The outlook has been changed to ratings under review from positive.

“The downgrade reflects AFE's constrained liquidity position, which substantially limits its financial flexibility, particularly in the currently challenging operating environment. The capital markets dislocation observed since early 2022, brought about by rapidly rising interest rates, a worldwide economic deceleration, and the Russia-Ukraine military conflict, has greatly impaired access to capital markets and prospects of debt issuances for non-investment grade issuers,” Moody’s said in a press release.

The agency noted AFE’s business mix is changing especially in the direction of direct real estate investment.

The review will assess AFE's liquidity situation and plans for its revolver, which is due June 30, the effect of the shift in investment and earnings mix on the company's credit profile with the aim of establishing appropriate leverage, capitalization and other credit metrics guidance in light of the changed business model, Moody’s said.

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