Fitch lowers IRSA

Fitch Ratings said it downgraded IRSA Inversiones y Representaciones SA’s long-term local and foreign currency issuer default ratings to C from B-. The downgrades follow IRSA’s announced launch of a tender to exchange its $181 million of local unsecured notes due in November for new unsecured notes due in 2023, which Fitch said it considers a distressed debt exchange (DDE) as per its DDE criteria.

If the proposed tender is successfully completed, the IDR will be cut to restricted default. “Subsequently, Fitch will re-rate IRSA’s IDRs to a level that is consistent with the company’s post-exchange capital structure and risk profile, which would likely be within a low speculative rating range,” Fitch said in a press release.

Fitch also lowered IRSA Propiedades Comerciales SA’s long-term foreign and local currency IDRs to CCC from B- and IRSA PC’s unsecured notes to CCC/RR4 from B-/RR4.

“The downgrades reflect the strong parent-subsidiary linkages between IRSA and IRSA PC, exposure to Argentina’s challenging macro and business environment, as well as the sharp deterioration in operational performance of the company’s real estate portfolio driven by the pandemic and deteriorating economy,” Fitch said.

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