S&P lowers Edzan

S&P said it downgraded Ezdan Holding Group QSC to B- from B and its two sukuks, one due next May, to CCC+ from B-. The agency placed the B- rating on CreditWatch with negative implications.

“We anticipate that the economic contraction in Qatar in 2020, prompted by Covid-19 and low oil prices, will weigh on Ezdan's performance. We now forecast a 5.2% contraction in Qatar's real GDP in 2020, which we think will lead to higher unemployment and lower purchasing power. As a result, we think that the real estate market in Qatar will remain difficult, with likely continued pressure on rents,” the agency said in a press release.

“Overall, we forecast a low-single-digit decline in the group's revenue in 2020 from QAR 1.37 billion reported in 2019,” S&P said.

The CreditWatch negative indicates S&P could lower Ezdan again over the next three months in the absence of tangible progress in repayment options for its 2021 sukuk, if debt acceleration has been triggered due to a covenant breach, or if its EBITDA contracted materially below our current forecast, the agency said.

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