Fitch trims Red Star Macalline

Fitch Ratings said it downgraded Red Star Macalline Group Corp. Ltd.'s long-term foreign-currency issuer default rating, senior unsecured rating and rating of the $300 million senior notes due 2022 to BB from BB+.

“The downgrade reflects Fitch's estimate that RSM's recurring EBITDAR/gross interest + rent dropped to around 1.5x at end-2020, worse than our previous forecast of 1.7x. RSM had a larger drop in recurring revenue, and capex was higher than our expectation. Fitch expects coverage of above 1.5x in 2021-2022 if RSM slows capex and financial investment cash outflow. Fitch also thinks that RSM's opportunistic liquidity management is no longer commensurate with a BB+ rating even if recent liquidity has been adequate,” the agency said in a press release.

The outlook is negative.

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