Moody's cuts PDG Realty debt

Moody's America Latina said it downgraded the corporate family ratings assigned to PDG Realty SA Empreendimentos e Participacoes to B1 on the global scale and to Baa3.br on Brazilian national scale.

At the same time, Moody's downgraded the company's R$250 million senior secured Cedula de Credito Bancario to B1/Baa3.br, while R4140 million senior unsecured debentures referring to the company's seventh issuance of debentures were downgraded to B2/Ba2.br.

The outlook remains negative.

Moody's said the downgrade in PDG's ratings reflects the continued deterioration in the company's leverage ratios over the last six months and Moody's expectation that credit metrics will remain pressured during the rest of this year.

Although the management's turnaround plan should lead to significant improvement in cash generation and higher profitability in the medium term, the agency said its perception is that the recovery in credit metrics will be only gradual in 2014.

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