Moody’s drops Kaisa, debt to B3

Moody's Investors Service said it downgraded Kaisa Group Holdings Ltd.'s corporate family and senior unsecured debt ratings to B3 from B1.

The ratings are under review for a further downgrade.

The actions follow Kaisa's Dec. 28 announcement that Tam Lai Ling, the executive director and vice chairman of the board, and Cheung Hung Kwong, the chief financial officer, resigned from the company. Their resignations took effect on Dec. 29.

The company has not announced replacements for the two positions.

"The ratings downgrade reflects our concern that the resignations of the two key senior executives raise uncertainties and challenges over the company's ability to manage operational disruptions arising from the restrictions and suspensions of its projects in Shenzhen," Moody's vice president and senior analyst Franco Leung said in a news release.

"If these adverse developments are not resolved in a timely manner, the company's cash flow will weaken and its liquidity risk will rise."

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