S&P cuts Shanghai Zendai note

Standard & Poor's said it affirmed the B long-term corporate credit rating on Shanghai Zendai Property Ltd., and lowered the company's senior notes rating to B- from B.

All of the ratings have been removed from CreditWatch, where they were placed with negative implications in February.

The outlook is negative.

The affirmation follows the company's recent full settlement of the outstanding land premium for a project on Shanghai Bund, S&P said. The payment has removed the uncertainty over the company's liquidity and financial positions, the agency said.

Nevertheless, the agency said it believes the rating will remain under pressure because the company's credit ratios are anticipated to remain weak due to increased borrowings, the possibility of additional capital contributions to the Shanghai Bund project and large refinancing needs in 18 months.

The downgrade also reflects structural subordination risks, S&P said.

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