Fitch changes Pershing Square to negative

Fitch Ratings said it affirmed Pershing Square Holdings, Ltd.'s long-term issuer default rating and senior unsecured debt rating at BBB+.

The outlook was revised to negative from stable.

Fitch said the outlook revision reflects Pershing Square’s extended investment underperformance and continued share repurchase activity, which collectively increased the company’s leverage and reduced the amount of cushion that it has to withstand additional market value declines.

Recent investment underperformance has also weakened the franchise of Pershing Square’s investment manager, Pershing Square Capital Management, LP, leading to outflows in open-end funds.

As a result, Fitch said it believes Pershing Square Capital Management’s future ability to exert economic and reputational influence on portfolio companies may be diminished.

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