Brickwork Ratings reaffirms 'BWR BBB+(SO)' for Lodha Developers' structured Secured NCD Issue

Brickwork Ratings (BWR) has reaffirmed the rating of 'BWR BBB+ (SO)' (Pronounced BWR Triple B Plus structured obligation) with a stable outlook for the long term structured secured NCD Issue of INR 825 Cr of Lodha Developers Ltd. Consequent to the repayment of the first installment of the principal, the outstanding under the NCD Issue has reduced to INR 775 Crore.The rating 'BWR BBB+ (SO)' stands for an instrument that is considered to have moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk.

BWR has essentially relied upon the audited financial results of Lodha Developers Ltd of FY11, estimates for FY12 (audited results are not yet available), projected financials and information and clarification provided by the company management.

The rating factors, inter alia, the experienced management team of Lodha developers Ltd, its healthy order book position and dominance in residential segment. The rating is however constrained by project execution risk, very high leverage, and the current situation in the real estate industry.

Source : Equity Bulls

Keywords