Fitch downgrades WeWork

Fitch Ratings said it downgraded WeWork Cos., LLC and WeWork Inc.'s long-term issuer default rating to C from CC following the company's election to withhold interest payments on its first-, second- and third-lien notes.

The agency downgraded the first-lien notes from CCC-/RR3 to CC/RR3.

In addition, Fitch affirmed the second- and third-lien notes at C/RR6.

The ratings impact about $1.4 billion of WeWork's debt.

WeWork has elected to withhold its interest payments due Oct. 2.

The company has a 30-day grace period to make the payments before triggering an event of default under the indentures governing the notes.

The company commented that this will enhance liquidity while they attempt to rationalize their real estate portfolio and improve their capital structure.

“WeWork's restructuring in the spring provided additional liquidity, but the company has continued to burn through cash since then,” Fitch said in a news release.

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