Moody’s upgrades Diversified Healthcare Trust’s CFR to Caa1 Investing.com -- Moody’s Ratings has upgraded Diversified Healthcare Trust’s (NASDAQ:DHC) corporate family rating to Caa1 from Caa3, while maintaining a stable outlook. The rating agency also upgraded DHC’s senior secured rating to B3 from Caa2, backed senior unsecured to Caa1 from Caa3, and senior unsecured to Caa2 from Ca. The REIT’s speculative grade liquidity rating remains at SGL-4. The upgrade reflects reduced default risk following DHC’s refinancing of its June 2025 maturity and progress toward addressing its January 2026 maturity through asset sales and secured debt financing. Moody’s expects DHC’s adjusted net debt to EBITDA to improve to approximately 9x by the end of 2025, down from 11.6x at the end of 2024. This improvement stems from substantial growth in the REIT’s senior housing operating portfolio, driven by increasing demand from an aging population and limited new supply. The REIT’s senior housing segment contributes about 50% of net operating income but operates with short-term leases and high fixed costs. DHC’s medical office portfolio provides stability as these tenants typically maintain longer lease terms. In the first half of 2025, DHC successfully refinanced its June 2025 maturity through secured debt issuance and repaid $300 million of its January 2026 zero-coupon secured notes using asset sale proceeds, leaving approximately $641 million outstanding. As of June 30, the REIT had about $280 million in additional asset dispositions under agreement or letter of intent. Despite these improvements, Moody’s maintains the SGL-4 liquidity rating, citing weak liquidity. At the end of June, DHC had $141.8 million in cash and full availability under its new $150 million revolving credit facility, which is secured by 14 properties and expires in June 2029. The REIT faces capital expenditure needs of around $150 million in 2025. Following the January 2026 zero-coupon bond maturity, DHC’s next debt maturity is scheduled for the first quarter of 2028. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Moody’s downgrades OHLA’s rating to Caa1 on weak liquidity Investing.com -- Moody’s Ratings has downgraded Obrascon Huarte Lain S.A. (OHLA) to Caa1 from B3, with a stable outlook, the rating agency announced Friday. The downgrade affects OHLA’s corporate family rating, probability of default rating, and the backed senior secured notes issued by subsidiary OHL (BME:OHLA) Operaciones S.A.U. This action concludes the review for downgrade that began on April 4, 2025. Moody’s cited OHLA’s weak liquidity at the holding level as the primary constraint on its rating. Despite receiving €150 million in cash equity injections through February 2025, a €107.8 million cash collateral release, and €31.7 million from selling its 25% stake in CHUM, the company needed a third capital increase of €50 million to cover a €39.6 million cash outflow from an unfavorable ruling on a Kuwait road project in March 2025. The rating agency expects OHLA’s liquidity to remain vulnerable to working capital fluctuations, potential legal rulings, and cost overruns amid economic uncertainties. While the company faces no immediate refinancing risk before December 31, 2029, its 5.1% fixed cash coupon and increasing PIK interest component could weaken future free cash flow generation. Despite construction industry challenges, OHLA posted solid results in 2024 and Q1 2025. The company maintains an €8.3 billion order backlog (excluding Services division), providing 23.7 months of sales visibility. The construction division, representing 86% of the backlog with 42.4% exposure to the US market, increased its EBITDA margin to 5.0% in the twelve months to March 2025, up from 4.7% in 2024. OHLA’s total reported EBITDA margin rose slightly to 4.1% in the last twelve months from 3.9% in 2024. Moody’s expects the company to maintain solid operating performance with an EBITDA margin between 4.1% and 4.7% in the next 12-18 months. The Amodio family has demonstrated shareholder support through €128 million in cash equity injections from May 2020 to May 2025. OHLA has also restructured its Board of Directors following allegations of conflicts of interest, now including 5 independent members out of 10. The stable outlook reflects expectations that OHLA will maintain solid operating metrics and continue efforts to enhance liquidity ahead of upcoming PIK interest increases. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. Should you invest $2,000 in OHLA right now? With OHLA making headlines, savvy investors are asking: Is it truly valued fairly? In a market full of overpriced darlings, identifying true value can be challenging. InvestingPro's advanced AI algorithms have analyzed OHLA alongside thousands of other stocks to uncover hidden gems. These undervalued stocks, potentially including OHLA, could offer substantial returns as the market corrects. In 2024 alone, our AI identified several undervalued stocks that later surged by 30 or more. Is OHLA poised for similar growth? Don't miss the opportunity to find out.

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