Fitch Ratings placed BR Properties SA's ratings on Rating Watch Negative, following the company's announcement that it agreed to buy the Centenario Plaza condominium in São Paulo for 433.4 million Brazilian reais.
The move reflects Fitch's view that the proposed acquisition will have a negative impact on the company's liquidity and high leverage ratios.
The ratings affected are the company's BB- long-term foreign currency issuer default, long-term local currency issuer default and $285 million senior unsecured perpetual note ratings, as well as its A(bra) long-term national scale rating.
Fitch said it expects the planned acquisition to increase BR's net leverage to roughly 8.7x and that the company's ratings will be downgraded to B+/BBB+(bra) if the transaction is approved based on the announced terms and conditions.
As of May 25, US$1 was equivalent to 3.28 Brazilian reais.