S&P slashes China Vanke to junk

S&P said it downgraded its ratings for China Vanke Co. Ltd. to BB+ from BBB+, and its subsidiary Vanke Real Estate (Hong Kong) Co. Ltd. and its senior unsecured notes to BB from BBB.

China Vanke’s contracted sales are expected to plunge to RMB 270 billion–RMB 280 billion on a total basis in 2024-2026, down by 25%-28% from RMB 376 billion in 2023, and by 60% from a peak of RMB 704 billion in 2020, the agency said.

S&P said it sees the company’s leverage, as measured by the ratio of debt to EBITDA, swelling to 5.2x-5.4x in 2024-2025, before improving to 4.6x in 2026.

The outlook is negative.

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