Trump Tower bonds downgraded
Only days after Donald Trump incurred the wrath of Panamanian politicians and was declared persona non grata by city council, news emerged that Trump Tower bonds have been downgraded.
As the developers prepare for a “grand opening” of the much ballyhooed structure, the Fitch ratings agency downgraded the $220 million in bonds issued by the developers of the Trump Ocean Club building due to delays in the delivery of units and a reduction in accounts receivable.
According to a statement from the agency issued February 18 and released by the Panama Stock Exchange this week, the bonds have been downgraded from B+sf to Bsf.
La Prensa reports that to the developer of the project, Newland International Properties, the downgrade is not a serious concern.
"The holders of bonds should feel the same level of security as before," said Newland official Roger Khafif, who claimed the value of the bonds has not changed.
Fitch also noted problems the developer is having with the operator of the casino that will be located within the building. But Khafif explained that although a recent deal with a casino operator has fallen through, there are four other groups interested in operating the facility.
Fitch recognized that there are sufficient funds to make debt service payments in May 2011, but warns that if units continue to be delayed, it will be more difficult to meet future obligations.
Newland officials said that, of the 900 units sold, 35 buyers had dropped out. The delivery of units, including commercial areas, will take place between April and July, according to the promoters.
