Fitch downgrades Ansal Properties on debt restructuring

Global rating agency Fitch today downgraded long-term rating of Ansal Properties and Infrastructure (API) due to restructuring of company's debt.

"The downgrade of the national long-term rating reflects Fitch's treatment of API's financial restructuring with banks, financial institutions and mutual funds as coercive," the rating agency said in a release.

Fitch has downgraded Ansal Properties' national long-term rating to the lowest speculative grade 'D' from 'BB-', which is three notches higher from the lowest mark.

"...Restructuring has not resulted in significant impairment of the contractual terms for the creditors, with the revised terms envisaging an extension in maturity profile and keeping the other loan terms unchanged," Fitch said.

It, however, said the restructuring was essential for Ansal to avoid a liquidity crunch and would have otherwise resulted in a default on its debt obligations.

At the same time, the rating agency said that post-restructuring, the company's rating would be 'B-', slightly lower than 'BB-'.

The rating agency has assigned negative outlook to the company's rating, which means that ratings could be downgraded further in future.

The negative outlook reflects that the operating environment in the Indian real estate sector, though slightly improved, still remains subdued.

Ansal could not be reached for comment.Global rating agency Fitch today downgraded long-term rating of Ansal Properties and Infrastructure (API) due to restructuring of company's debt.

"The downgrade of the national long-term rating reflects Fitch's treatment of API's financial restructuring with banks, financial institutions and mutual funds as coercive," the rating agency said in a release.

Fitch has downgraded Ansal Properties' national long-term rating to the lowest speculative grade 'D' from 'BB-', which is three notches higher from the lowest mark.

"...Restructuring has not resulted in significant impairment of the contractual terms for the creditors, with the revised terms envisaging an extension in maturity profile and keeping the other loan terms unchanged," Fitch said.

It, however, said the restructuring was essential for Ansal to avoid a liquidity crunch and would have otherwise resulted in a default on its debt obligations.

At the same time, the rating agency said that post-restructuring, the company's rating would be 'B-', slightly lower than 'BB-'.

The rating agency has assigned negative outlook to the company's rating, which means that ratings could be downgraded further in future.

The negative outlook reflects that the operating environment in the Indian real estate sector, though slightly improved, still remains subdued.

Ansal could not be reached for comment.