WeWork cuts more deeply the territory of junk food

S & P's global ratings downgraded WeWork's credit rating into a junk zone, as it feared it could not realize its growth plans.

The credit rating agency on Thursday lowered WeWork's rating to B- and gave it a negative outlook, saying that a "heightened risk of recession" could affect its liquidity position and its access to credit. capital.

"This deterioration reflects the increased uncertainty surrounding The We Company's ability to raise capital to support aggressive growth and the pressure this places on liquidity," analysts at S & P said. "These uncertainties are the result of the weak receipt of The We Company's IPO, in part because of what we consider to be poor governance practices. "

WeWork suspended its initial public offering earlier this month due to investor concerns about its business model, valuation and governance standards.

On Tuesday, the founder, Adam Neumann, stepped down as chief executive officer amid rising concerns over corporate governance standards, which gave his shares 20 times the ordinary shareholder voting rights. He remains in the company as non-executive chairman.

"Despite some improvements in post-filing corporate governance practices, it is unclear whether these changes will lift investor sentiment," said S & P, adding that Thursday's downgrade did not take into account additional SoftBank investments other than the US $ 1.7 billion to come in 2020..

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S & P said its negative outlook was due to uncertainty surrounding The We Company's liquidity situation and its access to capital. He warned that WeWork could still be degraded if the company could not obtain additional funds or if it suffered "significant operational disruptions caused by a sharp decline in occupancy rates, a loss of key talent or a decline the confidence of the owners and the ability to obtain favorable results. rental conditions. "