S&P Global Ratings lowered its long-term issuer credit rating on Qatar's Ezdan Holding Group to BB- from BB.
The outlook is stable.
The rating agency also lowered its issue rating on the company's senior unsecured sukuk to B+ from BB-.
The action follows the erosion of the diversified real estate company's portfolio of available-for-sale assets to 2.5 billion Qatari riyals on Dec. 31, 2017, from 6.6 billion riyals as of Dec. 31, 2016, due to the sale of those assets. The rating agency also felt that the company's choice to reinvest extra cash into real estate instead of paying down debt contributed to the downgrade.
The stable outlook reflects the rating agency's view that Ezdan's recurring cash flow, mainly from inexpensive residential assets, and its moderate debt leverage should remain steady in 2018 to 2019, which would counter further pressures from weakening macroeconomic conditions.
As of Feb. 23, US$1 was equivalent to 3.64 Qatari riyals.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.