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Fitch cuts Global Cloud Xchange, notes
Fitch Ratings said it downgraded Global Cloud Xchange Ltd.’s long-term foreign- and local-currency issuer default ratings to CCC from B-.
The agency also downgraded the rating on GCX Ltd.’s $350 million 7% senior secured notes due 2019 to B- with a recovery rating of RR2 from B+/RR2. GCX Ltd. is a wholly owned subsidiary of Global Cloud Xchange.
Fitch said the downgrade reflects its view that Global Cloud Xchange faces excessive refinancing risk around the $350 million secured notes due August 2019 due to uncertain trading conditions and fall-out from the default and breakup of its 100% parent, Reliance Communications Ltd.
The agency said it believes that timely refinancing may be a challenge without greater certainty on the future relationship with Reliance and clearer trading prospects; the bond's current yield to maturity is around 11% to 12%.
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