Moody’s is no longer rating WeWork

The rating agency said it doesn’t have enough information

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
A photo illustration of the proposed Lower Platte River Corridor (Getty, Plan Preserve Play NE)
Nebraska lawmakers mull digging $1B recreation lake
Nebraska lawmakers mull digging $1B recreation lake
Illustration of Stefan Soloviev (HaydenSoloviev, CC BY-SA 4.0, via Wikimedia Commons, Getty)
Soloviev bets long-dormant Midtown East site in casino sweepstakes
Soloviev bets long-dormant Midtown East site in casino sweepstakes
CHIP's Jay Martin and HCR Commissioner RuthAnne Visnauskas (Getty)
Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?
Lies, damn lies, and statistics: Did rent-stabilized vacancies really fall?
PulteGroup's Ryan R. Marshall and RedFin's Glenn Kelman (PulteGroup, RedFin, Getty)
Wall Street is bidding up housing stocks again
Wall Street is bidding up housing stocks again
Empire Capital Holdings' Josh Rahmani, Hakimian Capital's Michael Hakimian, RXR's Scott Rechler and 1330 6th Avenue (Getty, Hakimian Capital, Empire Capital Holdings, 1330aofa.com)
Empire Capital, partners close on $320M deal for 1330 Sixth Ave
Empire Capital, partners close on $320M deal for 1330 Sixth Ave
Urban Commons' Salvatore G. Takoushian with Wagner at the Battery
Urban Commons puts FiDi hotel into bankruptcy
Urban Commons puts FiDi hotel into bankruptcy
(Illustration by The Real Deal; Getty)
Multifamily faces stricter emission caps
Multifamily faces stricter emission caps
Amir Korangy, Michael Shvo and Jeff Greene
Michael Shvo and Jeff Greene talk distress, opportunities in office
Michael Shvo and Jeff Greene talk distress, opportunities in office
arrow_forward_ios

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

Loading...