Fitch Downgrades Emirates REIT’s Long-Term IDR and Sukuk Rating to ‘C’ on Distressed Debt Exchange

Fitch Ratings (Fitch) has downgraded Emirates REIT’s Long-Term Issuer Default Rating (IDR) to ‘C’ from ‘B+’ and its senior unsecured Sukuk issued through Emirates REIT Sukuk Limited to 'C'/RR4/35% from 'BB-'/RR3/57%.

Ratings Rationale

The ratings downgrade follows Emirates REIT’s announced proposal to exchange the current USD 400 million unsecured Sukuk that matures in December 2022 for secured notes maturing in December 2024. The existing 5.125% rate of the Sukuk will be maintained, but first-year distributions of USD 10.2 million will be accrued and paid at maturity. According to Fitch, the proposed transaction would be a material reduction for lenders and viewed as a Distressed Debt Exchange (DDE), due to cash cou...