Moody’s: Dalian Wanda, Wanda HK to negative

Moody's Investors Service said it revised the outlook for Dalian Wanda Commercial Properties Co., Ltd.’s (DWCP) Baa2 issuer rating and Wanda Commercial Properties (HK) Co. Ltd.’s (Wanda HK) Baa3 issuer rating to negative from stable.

The agency also changed the outlook for the Baa3 senior unsecured debt rating for the bonds issued by Wanda Properties Overseas Ltd. and Wanda Properties International Co. Ltd. to negative from stable. Both of these companies are wholly owned subsidiaries of Wanda HK and their bonds are guaranteed by Wanda HK.

At the same time, Moody's affirmed the ratings.

"The negative outlook reflects our concerns that DWCP's credit metrics will weaken in the next 12-18 months and will pressure its Baa2 ratings," Moody's vice president and senior credit officer Kaven Tsang said in a news release.

"DWCP has lowered its contracted sales target for 2016 to RMB 100 billion, a 39% decline from contracted sales of RMB 164 billion in 2015. Moody's believes that this reduction is driven by the company's plan to reduce the level of development projects in lower tier cities in China."

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