MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it cut
its corporate credit rating on WCI Communities Inc. to 'CC' from 'CCC' and said
the outlook remains negative.
Concurrently, S&P also cut its ratings on the company's $650 million of
subordinated notes to 'C' from 'CC'.
The downgrades acknowledge that WCI is unlikely to have sufficient liquidity
to repay $125 million of 4 percent contingent convertible senior subordinated
notes due 2023 should noteholders exercise their option to redeem the notes on
the August 5, 2008, put date.
If the homebuilder is unable to satisfy its obligations under the terms of
the convertible notes, the noteholders would have the right to accelerate the
maturity of these notes, which could in turn trigger the acceleration of
substantially all of the company's debt, S&P said.
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