S&P raises Haya Real Estate

S&P said it upgraded its ratings on Haya Real Estate SAU and its senior secured notes to CCC+ from SD and D, respectively. The notes’ recovery rating remains 4, but the agency increased recovery prospects to 4 (35%) from 4 (30%) to reflect Haya’s lower debt.

The upgrade follows Haya’s repurchase of €51 million of senior secured notes with cash, which S&P said it considered a distressed exchange.

“The CCC+ long term issuer credit rating reflects our view of the unsustainable capital structure, absent favorable conditions. Haya’s senior secured notes mature in 2022, and we anticipate that absent favorable business, financial, or economic conditions, it may not meet its financial commitments. Our current expectation is that the company will likely not engage in any further tender offers, which we would likely view as another potential debt exchange, but instead build cash on the balance sheet to support the upcoming refinancing,” S&P said in a press release.

The outlook is negative.

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