S&P Global Ratings lowered struggling coworking giant WeWork Cos. Inc.'s issuer credit rating to CCC+ from B-, while placing all ratings on CreditWatch negative.
At the same time, the rating agency lowered its rating on The We Co. unit's unsecured debt to CCC+ from B.
Ratings noted that the company is facing mounting cash flow and liquidity pressure as it faces business disruption due to the global recession, the coronavirus outbreak and uncertainty surrounding backer SoftBank Group Corp.'s longer-term commitment to WeWork.
The rating agency said it will resolve the CreditWatch listing after it assesses the company's cash burn rate and potential steps to cut operating expenses. The rating agency will also evaluate WeWork's liquidity position in connection with the challenges it faces and limitations on external funding sources. The rating agency would also take into account factors including gaining greater clarity on SoftBank's tender offer, WeWork's ability to fully access the remaining $3.3 billion in debt funding, and SoftBank's longer-term level of commitment.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.
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