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S&P puts Wanda Commercial on watch
S&P said it placed Dalian Wanda Commercial Management Group Co. Ltd.’s BB+ long-term issuer credit rating, BB long-term issuer credit ratings on Wanda Commercial Properties (Hong Kong) Co. Ltd., (Wanda HK) and its BB long-term issue rating on the senior unsecured notes that Wanda HK guarantees.
“The result and timing of the listing of Zhuhai Wanda Commercial Management Group Co. Ltd. (Zhuhai Wanda), a subsidiary of China-based Dalian Wanda Commercial Management Group Co. Ltd (Wanda Commercial), is uncertain, in our view. The listing is yet to receive approval from the China Securities Regulatory Commission (CSRC),” S&P said in a press release.
The negative watch reflects the lack of clarity on the result and timing of the listing of Zhuhai Wanda, S&P noted.
“If the listing of Zhuhai Wanda fails, the liquidity and credit profile of Wanda Commercial and DWG may deteriorate. This is partly because of a potential obligation to buy back all pre-IPO shares totaling Chinese renminbi (RMB) 38.1 billion (plus other guaranteed return compensation), which we treat as debt in our analysis. It is also because the relationships Wanda Commercial and DWG have with other financial institutions such as banks and trusts are also likely to be tested. For example, DWG has a certain amount of syndicated loans that contain prepayment options. Under these options, the lending banks could require full prepayment from DWG if Zhuhai Wanda fails to be listed by an agreed date within 2023,” the agency said.
S&P said it aims to resolve the negative watch as soon as it can. “Once we have more details, we will be better placed to assess the likelihood of the listing of Zhuhai Wanda as well as Wanda Commercial's other back-up plans.”
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