Credit rating agency S&P Global on Thursday downgraded Qatari real estate developer Ezdan Holding's  long-term issuer credit rating to CCC from B-, citing waning liquidity and higher risk of default.

"The negative outlook on Ezdan reflects narrowing liquidity and high debt balances, which could lead to a distressed exchange, debt restructuring, or default over the next 3-12 months," S&P said.

S&P sees a high near-term refinancing risk because Ezdan is still in negotiations to secure a new credit line, with its $500 million senior unsecured sukuk maturing May 18, 2021.

"The company's refinancing options are narrowing ... without a committed refinancing plan or an equity contribution from its shareholder, we do not believe that Ezdan has sufficient cash or liquid assets on its balance sheet to repay its debt," S&P said.

The yield on Ezdan's sukuk due in May soared to a high of 82.1% on Thursday from a close of 17.7% on Wednesday, data from Refinitiv's Tradeweb showed. It later pulled back to 50.4%.

The yield on the company's Islamic bonds maturing in 2022 nearly doubled to 14.2% from 7.5%.

Ezdan has around 900 million Qatari riyals ($247.22 million) of secured debt maturing in 2021 and 2.7 billion riyals of sukuk and debt maturing in 2022, S&P said.

The rating agency also lowered its sukuk rating to CCC- from CCC+ and removed the company from CreditWatch where it was placed in May 2020.

S&P said it expects Ezdan's operating performance to improve slightly in 2021-2022 but not enough to materially reduce the very high leverage.

It expects revenue to improve by around 10% in 2021 due to the delivery of 2,500 units, an incremental recovery in residential rental rates, and improved occupancy for hotels, suites, and malls.

It sees 2022 revenue increasing by 20% as Qatar hosts the 2022 football World Cup.

Ezdan, a major developer of residential and commercial units in Qatar, could not immediately be reached for comment.

($1 = 3.6405 Qatar riyals)

(Reporting by Lisa Barrington; Editing by Simon Cameron-Moore and Jan Harvey) ((;))