Moody's cuts Kaisa to negative

Moody's Investors Service said it changed to negative from stable the outlook for the B1 corporate family rating and B2 senior unsecured debt rating of Kaisa Group Holdings Ltd. Moody's affirmed the ratings.

Kaisa's contracted sales in the first five months of 2011 have been weaker than expected, warranting a change in the outlook to negative, Moody's' said.

Kaisa's exposure to regulatory measures in Shenzhen and Guangzhou has adversely affected contracted sales in both these southern Chinese cities, the agency added. Kaisa will need to generate more contracted sales from new locations, but this could be a challenge.

Kaisa's B1 corporate family rating continues to reflect its track record in developing property projects in major Chinese cities, such as Shenzhen, as well as Kaisa's ability to purchase land for low cost for redevelopment projects in Guangdong Province, Moody's said.

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