- Downgrade indicates Macrotech debt obligation subject to very high risk
- Arrangements in place to repay all of $325 million of bonds: Macrotech
- Property companies have been increasingly borrowing from shadow banks
A Trump Tower developer in Mumbai has been cut by Moody’s Investors Service further into junk, reflecting deepening problems for the country’s real estate sector.
Macrotech Developers, earlier known as Lodha Developers, has been cut by one step to Caa1, which indicates that the firm’s debt obligation is subject to very high credit risk. The company’s $325 million bonds mature in March next year.
“While the company has made some progress in its refinancing efforts, its measures to date do not completely alleviate the significant refinancing risks,” said Sweta Patodia, a Moody’s analyst.
Property companies, which have been increasingly relying on shadow banks for borrowing, are struggling to roll over debt as the lenders themselves are facing a cash squeeze, raising prospects of a wave of defaults. A default by non-bank financier Dewan Housing Finance Corp. has also rattled investors this year.