OHL bonds fall further after Moody’s downgrade – Yahoo Finance Spain

By Robert Smith

LONDON (IFR) – Bonds of Obrascon Huarte Lain (OHL) fell for a third day after Moody’s golpease construction company with a downgrade of one notch in its rating on Wednesday.

bonds OHL already were under pressure on Monday after a weak first half results announced on Friday, extending its fall on Tuesday after an announcement of buyback of the company frighten investors.

Moody’s reduced the rating of OHL to “B3″, while placed the outlook negative, citing a cash flow negative free material levels recourse debt higher.

the bonus OHL 230 million with a coupon of 7.625 percent and maturing in 2020 fell five points to a bid price cash 73 Friday, according to Tradeweb, equivalent to a return of almost 19 percent. Its bonds of 400 million 4.75 percent coupon maturing in 2022 were at 60.50, having fallen more than two points during the day

The listing of the shares of the company fell even more. – despite the announcement of buyback. – with a fall of 24 percent on Wednesday

the downgrade is the second of Moody’s this year after reducing it by one notch to “B2″ with a stable outlook in March. That last downgrade triggered more guarantees be provided for a syndicated loan of 250 million euros OHL.

“They are adjusting their strategy to focus on projects with a lower margin, which is forcing them to cut debt “he said Matthias Hellstern, CEO of Moody’s to IFR.

” But despite using all the mechanisms that have, leverage has gone up rather than down, “he said.

the rating agency placed OHL leverage at 13.9 times its gross debt with recourse regarding its Ebitda. The company wants to reduce its leverage with recourse below 2 times, although calculated differently from Moody’s.

“We leverage nearly 14 times because we only included Ebitda cash business with resource in our calculations, while the number of consolidated EBITDA of the company includes payments provided for concessions in many years, “Hellstern said.

” we also exclude dividends from subsidiaries without recourse, because we believe that much of this is a non-cash payment will be offset by credit within the company, “he said.

the accounting practices OHL in its Mexican subsidiary allowed him to register in advance payments” endorsed “by the Government their contracts motorway tolls. The subsidiary OHL Concesiones made a loan of 1,000 million euros to the parent OHL SA in late 2014, which IFR said last year that raised concerns about the transparency of the company.

In contrast to Moody’s Fitch placed its rating of OHL trs steps above in “BB-” and reaffirmed its rating with a stable outlook in November

.