Modulaire - comment
The downgrade of the SUNs to CCC by Fitch will preclude some ratings-limited investors from owning them. Fitch reflects many of our own views on how 2025 will turn out and how 2026 will look; the agency also acknowledges that Modulaire has sufficient liquidity to weather the current storms. The impact of the wars in Iran and Ukraine could begin to weigh on the expected construction recovery in H2 2026. The bonds trade as proxy for peace in Ukraine and the Middle East, so we remain careful not to bet on our expectation of some improvement in the second half of the year, along with some capex reduction to bolster liquidity.