Moody’s Chops Panama’s Newland

Moody’s has downgraded the ratings of Panama-based Newland to B2 from B1, citing recent construction cost increases, which has resulted in a shortfall in the construction escrow account of about $26.9m. Failure by the developers to pay the required shortfall would constitute an event of default under the bond indenture resulting in the bond becoming due and payable immediately, the ratings agency says. Newland has 2 interest payments due in May and November, which the company has sufficient funds to pay through collections and a debt service reserve account. Newland is a real estate development company established to develop the Trump Ocean Club International Hotel & Tower in Panama City.