WeWork has been dealt another blow with Fitch Ratings downgrading the company and warning that the co-working startup could default on its obligations, according to a report by Fight Ratings.
WeWork Companies LLC and The We Company’s LT IDR has been officially downgraded from CCC+ to CCC and WeWork LLC’s Senior Unsecured Notes issue rating has dropped from CCC/RR5 to CC/RR6.
This spells more bad news for the flexible office space aggregator as it indicates a ‘substantial credit risk’ to investors and that the company defaulting is a very real possibility in the near future.
Even with massive backing from its long-term investor, SoftBank, it seems that the Japanese conglomerate can’t fully save the company from its ill-fitted fate.
COVID did a number on the company this year, which seems to be the nail in the coffin for the company, though it wasn’t always in perfect condition before the pandemic outbreak that sent many workers home from the office.
Since then, leadership has switched around, many big names jumped ship, and now the company itself has been officially downgraded.
Though the head of the company has high hopes for 2021, this newest blow is going to be a key factor in the corporate climate of the company, moving forward.