Fitch downgrades Guorui

Fitch Ratings said it downgraded Guorui Properties Ltd.'s long-term foreign-currency issuer default and senior unsecured ratings to CCC+ from B- .The recovery rating on the debt remains RR4.

Fitch also removed all the ratings from under criteria observation, where they were placed on Oct. 20, following the publication of the agency's updated corporate rating criteria.

“The downgrade reflects the heightened refinancing risk of the company's $323.75 million senior notes puttable in April 2022. It also reflects Guorui's slowdown in contracted sales and sustained weak liquidity position. The ratings are supported mainly by sufficient sellable resources from a quality land bank to support sales,” the agency said in a press release. Additionally, Guorui has $50 million in private-placement notes puttable in March 2022 due March 2023.

“We estimate the company's available cash, excluding regulated pre-sale proceeds, at end-2021 was insufficient to cover these offshore notes,” Fitch said.

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