The risk measurement agency Moody’s has lowered the outlook for the long-term debt of the Spanish construction group OHLA from positive to stable, while maintaining the company’s rating at B3, within the so-called ‘junk bond’. Through a report published this Thursday, Moody’s warns of the “persistent negative generation” in cash flow and “the weak available liquidity” by the Spanish company with the approaching maturity of various debt issues.
Specifically, half of the bond issue worth 487.2 million euros matures in 2025, the other 50% does so in 2026, thanks to the construction carried out by the firm after its recapitalization. On the other hand, the company has recently requested the consent of the bondholders to carry out certain modifications that concern the terms of the contract between creditors and the conditions of the bonds.
In this sense, the agency recognizes OHLA’s plan to reduce its debt before carrying out a refinancing, using the income generated by non-strategic assets such as the Canalejas project in Madrid, the Montreal University Hospital Center or its services division. If the strategy is successful, Moody’s expects OHLA to cut its debt in half, which will improve its chances of obtaining better refinancing terms, although it warns of the valuation risk of some of these assets.
For the coming months, Moody’s considered that the construction group will continue to improve its income generation thanks, mainly, to its “considerable” order book and the “solid” demand for infrastructure projects -especially in the United States-.
