Moody's cuts ratings of Chinese developer Country Garden
Reuters
Published Aug 10, 2023 07:53AM ET
Updated Aug 10, 2023 08:31AM ET
(Reuters) - Ratings agency Moody's (NYSE:MCO) on Thursday downgraded Chinese developer Country Garden's corporate family rating (CFR) to Caa1 from B1, citing heightened liquidity and refinancing risk after the company missed bond payments.
Caa1 rating is a level that signals a very high credit risk, according to the ratings agency's website.
Country Garden expects to record a half-year loss owing to higher impairment provisions on projects, it said on Thursday.
Moody's forecast a negative ratings outlook for Country Garden, citing uncertainty over China's biggest privately owned developer's ability to service its debt obligations.
Country Garden said on Tuesday that it has missed two dollar bond coupon payments due on Aug. 6 totalling $22.5 million, slipping into repayment troubles.
Moody's also reduced its forecast for the company's contracted sales for 2023 due to increased market concerns over the company's liquidity and financial positions.
"The company is also likely to increase its reliance on secured debt because of the deterioration in its credit quality. As a result, the expected recovery rate for senior unsecured claims at the holding company will be lower," Moody's said.
Moody's ratings change comes at a time when China's giant property sector is seeing a string of debt defaults by cash-squeezed developers, with China Evergrande Group, the world's most indebted property developer, at the centre of the crisis.
Chinese property shares have been volatile in recent weeks with contagion worries sparked by liquidity concerns over Country Garden resurfacing, while investors look to policymakers for more drastic support for the sector.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.