Ratings agency Moody’s has downgraded the issuer and senior unsecured ratings of Chinese property developer Longfor Group from ‘Baa2’ to ‘Baa3’, and has started a review for possible further downgrades, with the outlook remaining negative.
The downgrade reflects Moody’s expectation that the credit metrics and liquidity buffer of Longfor will be weighed down by the slowdown in contracted sales, ongoing margin pressure, and the continued limited access to debt capital markets, it said.
The review for downgrade is due to the high degree of uncertainty about the outlook for the property market in mainland China and the uncertainty about financing conditions, which makes it highly uncertain that Longfor will be able to improve its results of operations and restore its ability to raise capital.