Moody’s is no longer rating WeWork

The rating agency said it doesn’t have enough information

TRD NATIONAL /
Aug.August 30, 2018 09:00 AM

Adam Neumann in a pile of cash at a WeWork space (Credit: iStock, Getty Images, and WeWork)

Moody’s dropped its ratings of WeWork, saying it didn’t have enough information to evaluate the company’s creditworthiness.

Moody’s wasn’t being paid for the rating, Bloomberg reported. In April, the rating agency graded WeWork’s $702 million of unsecured debt on the lowest speculative-grade tier. Its assessment was lower than that of ratings agencies S&P and Fitch.

The junk ratings underscore the challenge of evaluating creditworthiness of startups that tout growth but have negative free cash flow, the report said. Moody’s rated the company B3, six notches into the junk spectrum. Strong demand had led WeWork to increase the size of its bond deal by 40 percent.

WeWork, which is seeking a new round of funding that would value it at about $35 billion, has at least $18 billion in lease obligations, including $5 billion due by 2022. The Adam Neumann-led company doubled its revenues in 2017 to $866 million, but it also more than doubled its losses to $933 million. The average revenue it makes per customer declined by 6.2 percent to $6,928.

Last month, WeWork said it’s launching a real estate advisory business that offers brokerage services. The program will represent companies and help them secure office space outside of WeWork’s locations.

It’s also ramped up incentives for brokers. WeWork is offering 100-percent commission to brokers who lure tenants away from rivals. [Bloomberg] — Meenal Vamburkar


Related Articles

arrow_forward_ios
Gov. Andrew Cuomo (Getty; iStock)

New York City lifts lockdown for some Covid hot spots

New York City lifts lockdown for some Covid hot spots
518 Broadway (Google Maps)

Four years vacant: Landlord offers dire outlook for Soho building

Four years vacant: Landlord offers dire outlook for Soho building
Sam Chang and TownePlace Suites by Marriott at 324 West 44th Street (Google Maps)

Hotelier Sam Chang’s businesses snagged millions in PPP loans

Hotelier Sam Chang’s businesses snagged millions in PPP loans
Vornado CEO Steven Roth with 1535 Broadway and 220 Central Park South (Getty, VNO, Google Maps)

Vornado sees $100M retail JV loss, $190M in 220 CPS gains

Vornado sees $100M retail JV loss, $190M in 220 CPS gains
Gov. Andrew Cuomo (Getty, iStock)

Commercial eviction and foreclosure ban extended until January

Commercial eviction and foreclosure ban extended until January
The Manhattan office market’s overall vacancy rate rose to a 24-year high of 13.3% in the third quarter (iStock)

Cushman & Wakefield paints bleak picture for Manhattan office market

Cushman & Wakefield paints bleak picture for Manhattan office market
Travis Kalanick (Getty; iStock)

Travis Kalanick cooks up a real estate empire

Travis Kalanick cooks up a real estate empire
Nightingale's Elie Schwartz and Madison's Brian Shatz (Whale Square)

Nightingale buys Whale Square in Sunset Park for $84M

Nightingale buys Whale Square in Sunset Park for $84M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...