Moody’s Monitors China Vanke and Subsidiary for Potential Downgrade

Moody’s Ratings made changes today to the credit ratings of Chinese real estate development company China Vanke Co Ltd (2202) and its subsidiary Vanke Real Estate (Hong Kong) Company Limited.

Moody’s withdrew the issuer rating of China Vanke, which was Baa3, and assigned a Ba1 Corporate Family Rating (CFR) to the company.

It downgraded Vanke Real Estate’s Medium-Term Note (MTN) program-supported senior unsecured rating from (P)Ba1 to (P)Ba2 and lowered the unsecured senior credit rating of bonds issued by Vanke Real Estate from Ba1 to Ba2.

Moody’s has placed all ratings under review for a downgrade. Previously, the outlooks for all entities were negative.

Kaven Tsang, Senior Vice President at Moody’s, stated, “The rating actions reflect Moody’s expectation that China Vanke’s credit metrics, financial flexibility, and liquidity buffer will weaken over the next 12-18 months due to the declining contracted sales amid the prolonged real estate market downturn in China and increased uncertainties about access to financing.”

Tsang added, “The review for downgrade reflects our concerns about the company’s ability to regain sales momentum, improve access to financing, and maintain sufficient liquidity buffer for ongoing refinancing needs.”

source: prepared by Melisa Beğiç

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