Moody’s lowers China Vanke view to negative

Moody's Investors Service said it revised China Vanke Co., Ltd.’s outlook to negative from stable, along with the outlook on its subsidiaries.

The agency also said it affirmed the company’s Baa1 issuer rating.

Moody’s also affirmed the provisional Baa2 backed senior unsecured rating on the medium-term note program of Bestgain Real Estate Lyra Ltd., along with the Baa2 backed senior unsecured rating on the bonds issued by Bestgain Real Estate Ltd. and Bestgain Real Estate Lyra.

Vanke Real Estate (Hong Kong) Co. Ltd., a wholly owned subsidiary of China Vanke, guarantees the program of Bestgain Real Estate Lyra and the associated bonds, along with the bonds issued by Bestgain Real Estate.

All of the notes and bonds are supported by a deeds between China Vanke, Vanke Real Estate and the bond trustee, Moody’s explained.

The negative outlook is due to China Vanke management's dispute with its largest shareholder, which could increase risks of changes to the company's existing management team, business strategy and financial policy, the agency added.

The negative outlook also reflects that fact that as long as the dispute remains unresolved, the company faces increased operating challenges and certain increased requirements by its banks, even without any change in management, Moody’s said.

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