Ind-Ra downgrades realty major Macrotech’s bank loans

Mumbai: India Ratings and Research (Ind-Ra) has downgraded ratings of Macrotech Developers Ltd (MDL) debt instruments to Ind BBB minus from Ind BBB plus and maintained the outlook as rating watch negative.

MDL’s bank loans of Rs 150 crore and non-convertible debentures of Rs 495 crore with a coupon rate of 9.5 per cent mature on July 13, 2023.

“The downgrade reflects in FY20-FY21, given upcoming repayment of debt, tight liquidity conditions in domestic markets and weak operating performance across domestic and London residential projects,” said -Ra.

The company (earlier known as Lodha Developers) is yet to definitive funding tie-up for refinancing its 324 million dollar bonds due in March 2020, it added.

“Also, timely collections from the Lincoln Square project to successfully meet its upcoming loan in December 2019 and creation of liquidity backups for domestic debt maturities in FY20-FY21 amid the slowdown in lending by non-banking financial companies (NBFCs) and housing finance companies to the sector will remain a key .”

MDL’s gross debt increased 13 per cent year-on-year to Rs 25,640 crore in FY19, mainly led by of construction finance loan for its London projects. Domestic debt remained stable at Rs 17,000 crore at FYE19 while London project debt increased to Rs 8,640 crore (FY18: Rs 6,360 crore).

As of June this year, MDL has of Rs 6,030 crore for FY20 which includes Rs 2,120 crore (250 million pounds) of for due in December 2019, Rs 2,260 crore (324 million dollars) of bonds due in March 2020 and Rs 1,630 crore of domestic debt.

MDL registered 17 per cent year-on-year decline in the total domestic and London residential sales volume to 6.48 million square feet and 25 decline in to Rs 7,250 crore in FY19.

However, domestic collections rose 9 per cent to Rs 8,660 crore in FY19 but collection for the London project will begin on completion of construction.

In the past three weeks, MDL has faced a rash of negative ratings from Moody’s and Fitch as well.