S&P downgrades Ezdan

S&P said it lowered the long-term corporate credit rating on Ezdan Holding Group QPSC to BB from BBB-.

The outlook is negative.

The agency also said it lowered the rating on Ezdan's senior unsecured sukuk to BB- from BBB-.

The downgrades stem from the weakening of Ezdan's financial risk profile due mainly to deterioration of its operating environment following the blockade of Qatar, S&P said.

The agency also said it understands that Ezdan has tight headroom under its covenanted debt-service coverage ratio, which has led to the reassessment of its liquidity to less than adequate.

A group of governments including Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Libya, and Yemen moved to cut diplomatic ties, S&P said, as well as trade and transport links with Qatar in June this year.

Ezdan's operating performance and financial ratios are expected to continue weakening in the next 12 to 24 months, especially if the blockade is tightened or prolonged, the agency said.

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