Moody’s: Sunac China view to negative

Moody's Investors Service said it changed the outlook on Sunac China Holdings Ltd.'s B2 corporate family and B3 senior unsecured ratings to negative from stable and affirmed both ratings.

The action follows Sunac's Jan. 13 announcement that it entered into sales-and-purchase agreements to acquire 8.61% of Leshi Internet (unrated), 15% of Leshi Pictures (unrated), and about 33.5% of Leshi Zhixin (unrated) for a total consideration of around RMB 15 billion.

"The negative outlook reflects Moody's concern that Sunac has increased its business risk because it has no experience in Leshi's businesses, which are developing. Furthermore, Sunac's liquidity position could be affected if further funding needs arise as Leshi expands its businesses," Moody's vice president and senior credit officer Franco Leung said in a news release.

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