Moody's maintains Greentown China

Moody's Investors Service said it will maintain Greentown China Holdings Ltd.'s Caa1 corporate family rating and Caa2 senior unsecured bond rating.

The outlook remains negative.

This follows news of early results of Greentown's tender offer and solicitation of bondholders' consent, which showed that about 90% of outstanding notes have been validly tendered and consent from bondholders holding about 92% of the outstanding notes has been received, Moody's said.

Moody's said it views this transaction as a distressed exchange given the fact that Greentown has technically breached certain provisions governing the bond indenture.

The company has high debt leverage and limited financial flexibility as the majority of its free cash resources will be applied to buy back the bond, Moody's added.

The rating further reflects Greentown's exposure to high near-term refinancing risk, in view of a potential put of RMB2.3 billion convertible bonds in May 2010, the agency said, but without a concrete refinancing plan in place.

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