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Avison Young, a major Canadian commercial real estate company, has defaulted on some of its debt payments amid the downturn in the property sector, according to a top credit-rating agency.

S&P Global Ratings said on Friday that it recently learned that Avison failed to make payments on its senior secured loan over the past two quarters. That prompted S&P to slash Avison’s credit rating to “selected default,” which is a default on one or more of a company’s financial obligations.

“We view these missed payments as a default under our criteria, given that the lenders did not receive the value they were initially promised in a timely manner,” S&P said in announcing the downgrade.

Avison said it has been working to improve its finances and that it was close to the “finish line of this process.”

“We have been focused on finalizing a transaction with our financial partners which will significantly strengthen Avison Young for the future,” company spokesperson Andrea Zviedris said in an e-mailed statement.

Avison is one of five major commercial real estate companies in Canada that work in all parts of the industry, including leasing, sales, property management and appraisals. Like the rest of the commercial property industry, Avison has had to contend with higher borrowing costs, fewer sales and a drop in leasing activity in retail and office space.

In addition to the downgrade, S&P said that its view of Avison’s management and governance has taken a turn for the worse.

“Our assessment of information received from the company has led us to revise our assessment of management and governance on the issuer to negative from moderately negative,” S&P analyst Vincent Fu said.

S&P did not offer more specifics on what the “information” entailed.

About six years ago, Avison embarked on an ambitious expansion to double its staff and establish itself as a major player in Europe, Asia and Australia. To do that, it received a $250-million investment from Caisse de dépôt et placement du Québec.

Avison now has 5,000 real estate professionals in 19 countries, according to its website.

Asked whether the pension fund was helping Avison with another round of financing, Caisse spokesperson Conrad Harrington declined to comment.

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