Moody’s reviews Dalian Wanda, Wanda HK

Moody's Investors Service said it placed Dalian Wanda Commercial Properties Co., Ltd.’s (DWCP) Baa2 issuer rating and wholly owned subsidiary Wanda Commercial Properties (HK) Co. Ltd.’s Baa3 issuer rating on review for downgrade.

The agency also placed the Baa3 senior unsecured debt rating for the bonds issued by Wanda Properties Overseas Ltd. and Wanda Properties International Co. Ltd., which are wholly owned subsidiaries of Wanda HK, under review for downgrade.

The rated bonds are guaranteed by Wanda HK and supported by Deeds of Equity Interest Purchase Undertaking and Keepwell Deeds between Dalian Wanda, Wanda HK and the bond trustee.

The issuers of the rated bonds have maintained – in interest reserve accounts – the equivalent of two periods of interest payments on the bonds.

"The review for downgrade reflects our concern that DWCP's credit metrics will weaken in the next 12-18 months, driven by our expectation of increased debt from its sizable development of retail malls and lower property sales," Moody's vice president and senior credit officer Kaven Tsang said in a news release.

"The review also reflects our concern that the company's sales could show more volatility due to its exposure to lower tier cities and its strategy to bulk sell retail malls."

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