S&P slashes Guangzhou R&F

S&P said it cut its ratings on Guangzhou R&F Properties Co. Ltd. and its subsidiary R&F Properties (HK) Co. Ltd. (R&F HK) to CC from B-.

Guangzhou reported a tender for its $725 million of senior unsecured notes due on Jan. 13, 2022, at a discount and is asking noteholders' consent to extend the notes’ maturity to July.

“We lowered the rating on Guangzhou R&F because we view the proposed transaction as a distressed restructuring, given the company is seeking the tender at a discount and to extend the maturity. In addition, we believe the company is vulnerable to nonpayment on its U.S. dollar-denominated senior notes upon maturity in January in the absence of the proposed restructuring,” S&P said in a press release.

“Contrary to our previous expectation, we believe Guangzhou R&F does not currently have the offshore funds fully ready yet for the imminent bond maturity and has less than one month left to prepare funds for repayment,” the agency added.

However, S&P noted the company does have plans to raise the funds.

The outlook is negative.

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