S&P cuts Evergrande to B-, notes to CCC+

Standard & Poor's said it lowered its long-term corporate credit rating on Evergrande Real Estate Group Ltd. to B- from B+ and the long-term Greater China regional scale rating to cnB- from cnBB-.

The outlook is negative.

At the same time, the agency downgraded its long-term issue rating on the company's senior unsecured notes to CCC+ from B and the Greater China regional scale rating on the notes to cnCCC+ from cnB+.

S&P said it downgraded Evergrande because the company's financial position deteriorated more seriously than expected in 2015, and the agency does not anticipate any significant improvement over the next 12 months.

Evergrande's leverage has weakened materially. Borrowings surged in 2015, with total debt of RMB 370 billion (including perpetual capital instruments), compared with RMB 212 billion in 2014. The debt-to-EBITDA ratio rose to 15 times at the end of Dec. 31, 2015, from 9.1 times a year earlier. EBITDA interest coverage also dropped to 1 times compared with 1.3 times in 2014.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.