S&P slices Greenland Holding

S&P said it lowered Greenland Holding Group Co. Ltd.’s issuer rating to B- from B+ and the long-term issue rating on the senior unsecured notes the company guarantees to CCC+ from B. The agency also downgraded Greenland's strategically important subsidiary Greenland Hong Kong Holdings Ltd. to B- from B.

S&P placed all the ratings on CreditWatch with negative implications.

“Greenland's liquidity will remain under pressure over the next 12 months, in our view. The company's accessible cash has depleted as it used its cash resources for debt repayment. This is despite deleveraging efforts over the past 12-16 months. Greenland's ratio of unrestricted cash to short-term debt fell to 0.6x in 2021, and further to 0.5x at the end of March 2022, from 0.8x in 2020. We have therefore revised our assessment of the company's liquidity to be weak from less than adequate,” the agency said in a press release.

S&P noted Greenland’s funding options are limited and will probably have to rely on property sales, asset disposals, and refinancing of its onshore bank loans to meet its short-term debt maturities. However, this is complicated by sluggish sales. In the first four months of 2022, Greenland's contracted sales dropped by 57% year-on-year.

S&P said it aims to resolve the CreditWatch after it has more visibility on Greenland’s asset sales.

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