Fitch trims Ronesans

Fitch Ratings said it downgraded Ronesans Gayrimenkul Yatirim AS’ long-term issuer default rating and senior unsecured rating to B from B+ and removed them from rating watch negative. The outlook is negative.

“The downgrade reflects material foreign currency risk as almost all of RGY’s debt is denominated in euros or U.S. dollars, but revenue is in Turkish lira, which has depreciated more than 40% in 2020. This has weakened credit metrics and may mean meeting debt covenants will be difficult, especially if the lira further depreciates,” Fitch said in a press release.

RGY is also exposed to the weak Turkish economy and retail market, which are still suffering from the pandemic’s effects. RGY granted rent forgiveness and discounts to help tenants and maintain occupancy. However, doing so lowered rental income, Fitch said.

The negative outlook reflects the ongoing uncertainty around the economy and lira, Fitch said.

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