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(Bloomberg) — WeWork Inc. was downgraded one notch by Fitch Rankings because the office-sharing upstart continues to lose cash and struggles to capitalize on a return-to-office push taking place at firms globally.
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Fitch lowered its score on WeWork to CCC from CCC+ Friday, saying its challenges will solely be exacerbated within the coming 12 months as firms trim employees, reduce spending in anticipation of a recession and transfer slowly to retreat from hybrid work schedules.
Fitch additionally downgraded the corporate’s senior unsecured bonds one notch to CC from CCC-. Costs for its 7.875% bonds due 2025 have plummeted by virtually 50% since their issuance in 2018 and at the moment are altering palms at round 51 cents on the greenback, as of 4:22 p.m. in New York, Hint knowledge present.
Learn extra: Junk or Actually Junky? The Diverging Views on WeWork’s New Bonds
The downgrade comes after the corporate’s earnings fell wanting Wall Road’s expectations within the third quarter. WeWork famous it had misplaced $629 million, in contrast with a mean estimate of $367 million. And though extra employees have come again to the workplaces, reaching its pre-pandemic numbers is prone to show robust, Fitch mentioned.
WeWork made its public markets debut in October 2021 following a merger with particular function acquisition firm BowX Acquisition Corp. It failed in its first effort to go public in 2019.
Fitch was probably the most bullish credit score grader when the agency made its debut bond deal in 2018, assigned the debt a BB- score, which is speculative however with satisfactory monetary flexibility. S&P International Ranking’s and Moody’s Buyers Service’s had been much less optimistic, with their scores starting from B+ to Caa1.
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