WeWork bonds, already junk, downgraded by Fitch

first_imgWeWork CEO Sandeep Mathrani (Wikipedia Commons; iStock)WeWork’s credit rating, already rated as junk, has been downgraded on concerns that the pandemic could seriously weaken demand for office space.Ratings agency Fitch dropped WeWork’s long-term issuer default rating Thursday one notch from CCC+ to CCC. Both scales are non-investment grades, otherwise known as junk or high-yield status, representing a real possibility that the company will default on its credit obligations.“The downgrade reflects Fitch’s concern over the viability of WeWork’s business model in light of a potential lasting shift by companies to a hybrid office model that leads to permanently lower office space demand,” the ratings agency wrote.“While WeWork has made material progress to reduce its cash burn rate, in a scenario where demand is structurally lower, Fitch sees WeWork as potentially requiring additional liquidity sources inclusive of and beyond the full $3.3 billion SoftBank financing commitment,” the agency continued.ADVERTISEMENTRead moreWhat are We worth?The story of WeWork’s mysterious first investorAdam Neumann, deal junkie: CEO ramps up personal bets as WeWork balloons Message* Email Address* Full Name*center_img This content is for subscribers only.Subscribe Now Fitch and other ratings agencies dropped WeWork’s rating from investment grade to junk bond status in October of last year after the company’s aborted IPO. The next rating two notches down on Fitch’s scale — CC — would mean that the ratings agency believes that a default seems probable.WeWork’s bonds that mature in 2025 were most recently trading at about 63 cents on the dollar, according to Trace data cited by Bloomberg News.Fitch noted that WeWork has taken some steps toward strengthening its balance sheet this year, including improving its cash-burn rate, exiting obligations to build out new locations and trimming overhead through staff reductions.SoftBank earlier this summer committed another $1.1 billion to the office-space provider.But that may not be enough if the office market does not recover from the pandemic. In Manhattan, only 10 percent of workers have returned to their offices; even in cities with less restrictive lockdown policies, like Houston, that number is still below 50 percent.Contact Rich Bockmannlast_img read more


first_img Comments   Share   Derrick Hall satisfied with D-backs’ buying and selling Arians relaying the news of Mathis being day-to-day is seemingly good news after the offensive lineman was expected to undergo an MRI of his foot on Monday, according to ESPN’s Adam Caplan.Losing Mathis would wtest Arizona’s offensive line depth. The 34-year-old performed well in his first game with the Cardinals, according to Pro Football Focus. In relief, Watford earned the unfortunate distinction of having the NFL’s worst grade for a right guard during Week 1, according to the website.Watford struggled blocking in both the pass and run game. He allowed a quarterback hit, and there were two times where he was beaten while pass blocking, but a pressure wasn’t recorded; he was also beaten twice for tackles in the run game.That, of course, is a small sample size of less than a half of football.The Cardinals consider Watford their Swiss Army Knife with his ability to play multiple positions on the offensive line. It is possible he is still shaking off rust after missing time in training camp due to a knee injury suffered in early August. Grace expects Greinke trade to have emotional impact Arizona Cardinals guard Evan Mathis is day-to-day with a foot injury, head coach Bruce Arians said during a Tuesday interview on SiriusXM NFL Radio. Top Stories center_img The 5: Takeaways from the Coyotes’ introduction of Alex Meruelo Arizona Cardinals guard Evan Mathis (69) is helped off the field after an injury against the New England Patriots during the first half of an NFL football game, Sunday, Sept. 11, 2016, in Glendale, Ariz. (AP Photo/Rick Scuteri) Former Cardinals kicker Phil Dawson retires Arians says @EvanMathis69 is “day-to-day” with foot injury & says loss of Frostee Rucker will hurt from leadership [email protected]— SiriusXM NFL Radio (@SiriusXMNFL) September 14, 2016Mathis went down midway through the second quarter in the Cardinals’ 23-21 loss to the New England Patriots on Sunday with what was called a left foot injury. He briefly returned but was eventually replaced at right guard by Earl Watford.last_img read more