Fitch views Howard Hughes negatively

Fitch Ratings said it revised its outlook for Howard Hughes Corp. to negative from stable and affirmed the BB rating on the company and the BB/RR4 ratings on its unsecured bonds. The agency also assigned a BB issuer default rating to the holding company Howard Hughes Holdings Inc. with a negative outlook.

“The negative outlook reflects the anticipation of the company operating with elevated leverage in 2023. This is commensurate with the timing of minimal condo deliveries, with leverage declining to towards the top of the sensitivities range in 2024, before the expectation of a further decrease in leverage through the remainder of the forecast period,” Fitch said in a statement.

Fitch said it projects the holding company's net debt to recurring operating EBITDA leverage to be high in 2023 at around 13x, after exhibiting leverage of 7.4x in 2022, citing the absence of substantial delivery of condo sales in 2023 before an expected decrease in leverage to around the 9x range with the resumption of condo sales deliveries in 2024.

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