S&P slices Kaisa Group

S&P said it sliced Kaisa Group Holdings Ltd.’s issuer rating to CCC+ from B.

“We view Kaisa's capital structure as unsustainable given the company's sizable near-term debt maturities, weakening liquidity, and inadequate free cash flow through 2022. A total of about $3.2 billion (principals only: about Chinese renminbi [RMB] 20.6 billion) of offshore senior notes will be due in the next 12 months to October 2022. This includes the $400 million notes due on Dec. 7, 2021, on top of RMB 9 billion-RMB 10 billion of other onshore and offshore debt maturities that we believe could be due in the next 12 months,” S&P said in a press release.

The agency said it is possible Kaisa could liquidate six of its Hong Kong projects for US$1 billion-US$1.2 billion more promptly given the residential nature. Selling office towers and hotels in mainland China may take more time.

The outlook is negative.

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