S&P lowers Shimao regional ratings, view to negative

S&P said it revised the outlook on Shimao Property Holdings Ltd. to negative from stable.

The agency also said it affirmed the company’s BB+ long-term corporate credit rating and the BB rating on its outstanding senior unsecured notes.

The agency also said it lowered the company’s long-term Greater China regional scale to cnBBB from cnBBB+ and on the notes to cnBBB- from cnBBB.

The outlook revision reflects Shimao’s weak leverage, which may not recover substantially over the next 12 months due to the company’s prolonged destocking process and weak sales execution, S&P said.

The company’s debt-to-EBITDA ratio is expected to hover at about 5x in 2016 with minimal improvement, which is weak for the rating, the agency explained.

The company’s weaker-than-expected debt-to-EBITDA ratio of 5x in 2015 was a result of lower sales, missed revenue booking target and eroded margins, S&P said.

But Shimao should maintain a stable operating performance in 2016, the agency said.

© 2015 Prospect News.
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