Moody's lowers Real People

Moody's Investors Service said it downgraded Real People Investment Holdings Ltd.'s global scale issuer rating to Ca from Caa2 and national scale issuer rating to Ca.za from Caa2.za.

Moody's also said it affirmed Real People's short-term global scale and national scale ratings at not-prime and not-prime.za, respectively.

The outlook is negative.

The downgrades capture the increased risk that its creditors will incur significant losses, owing to a capital shortfall following the recent announcement that the company entered into a debt standstill agreement with the majority of its creditors, Moody's explained.

The debt standstill agreement is intended to facilitate ongoing creditor negotiations to restructure Real People's capital structure, the agency said.

The downgrades also reflect that Real People's senior unsecured creditors will suffer significant losses on the back of rising capital needs primarily due to higher loan loss provisioning, Moody's said, and as part of its financial restructuring.

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