Fitch Ratings downgraded Chinese property developer Country Garden’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs), senior unsecured rating and the rating on the outstanding bonds to ‘BB-‘ from ‘BB+’, with Negative outlook.
The downgrade reflects the property sector’s continued poor capital-market conditions, limiting Country Garden’s access to unsecured funding and affecting its financial flexibility, it said.
“Country Garden’s contracted sales may have stabilised in recent months and Fitch believes its available cash balance and internal cash generation should be sufficient to cover its medium-term capital-market debt maturities. However, there remains uncertainty over the sustainability of its sales, as well as the availability of its cash on hand. Fitch believe these risks are appropriately reflected at the current rating level.”