S&P cuts Gemdale, withdraws ratings

S&P said it downgraded the issuer ratings on Gemdale Corp. to BB- from BB and its subsidiary Famous Commercial Ltd. to B+ from BB-. At the companies’ request, the agency withdrew the ratings. The outlook was negative at the time of withdrawal.

“In our view, Gemdale Corp.'s large exposure to joint-venture (JV) projects involves higher operational risk and contagion financial risk amid distress in a number of its JV partners.

“We expect the company to continue its prudent land investment strategy in the next 12 months. However, due to the consumption of quality land bank and less new acquisitions in 2022, we expect Gemdale's contracted sales to further weaken by 8%-10% in 2023, after a 20-25% decline in 2022, given the market remains weak. This will shrink revenue by 8%-13% annually in 2023 and 2024,” S&P said in a press release.

Moody's alters Cambodia trend to negative

Moody's Investors Service said it changed the government of Cambodia's outlook to negative from stable and affirmed the B2 local- and foreign-currency issuer ratings.

“The negative outlook reflects a deteriorating external position as illustrated by the severe widening of the current account deficit, which Moody's expects to remain wide (albeit narrowing) over the next few years, raising financing concerns. Although Moody's expects concessional funding to continue and foreign direct investment (FDI) to remain stable, other sources of financing remain opaque – highlighting the risk of a quicker erosion of foreign-currency reserves than observed until now,” the agency said in a press release.

Additionally, Moody’s warned a slowing luxury property sector, still low tourism levels and moderating export growth compound risks.

Fitch rates CICC MTNs BBB+

Fitch Ratings said it assigned China International Capital Corp.’s planned issuance of medium-term notes an expected BBB+ to be sold under its MTN program. The agency has rated the program BBB+ since May 13, 2016. The issue amount and maturity structure will be finalized upon settlement.

Subsidiary CICC Hong Kong Finance 2016 MTN Ltd. will sell the notes.

“China International Capital Corporation Ltd. (CICC, BBB+/stable) has provided a keepwell deed in place of a guarantee, which shall cause CICC International and CICC Hong Kong 2016 MTN to have sufficient liquidity to meet their obligations for the proposed notes,” Fitch said in a press release.

The proceeds will be used to refinance debt and for working capital and general corporate purposes.

S&P drops Greenland Holding to SD

S&P said it dropped its issuer rating on Greenland Holding Group Co. Ltd. to SD, selective default, but affirmed the C rating on the senior unsecured notes due July 3, 2024, that the company guarantees. The agency plans to downgrade the rating on the notes to D once the expected maturity extension is approved.

On Oct. 31, Prospect News reported Greenland is soliciting consents to extend the notes’ maturity to November 2024.

Greenland has not repaid the principal of $362 million on its guaranteed senior notes that was due on Monday.

“We believe the China-based property developer is unlikely to repay the amount within five business days because it has announced an offer to extend the maturity of all its U.S. dollar notes,” S&P said in a press release.

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