A dramatic fall in their credit rating has hit Fairhold, which adds to the problems facing the struggling company. Of immediate concern to the financial markets are the loans due for repayment (or being refinanced) by October 2015. This is followed by other loans due in 2017.
In addition the values placed on Fairhold's property portfolio has been based on an actuarial basis, which is far in excess of what the market would pay for them in any sale.
A Notes have been reduced to a B2 rating and B Notes to a Caa3 rating.
In laymans terms, this means the A Notes means that Fairhold are vunerable to adverse business, financial or economic conditions which can lead to an "inadequate capacity to meet its financial commitments"
The A Notes are listed as "Highly speculative" whilst the B Notes are listed as "Default Imminent, with little prospect of recovery"
The B Notes have now slipped from the catergory of Investment Bonds to Junk Bonds.
