Moody’s changes Nan Fung to negative

Moody's Investors Service said it revised the outlook on Nan Fung International Holding Ltd.’s Baa3 issuer ratings, as well as on the perpetual capital security rating of Nan Fung Treasury (II) Ltd. and on the Baa3 senior unsecured and provisional Baa3 rating of Nan Fung Treasury Ltd.’s medium-term note program, to negative from stable.

At the same time, the agency affirmed the ratings.

The change in outlook follows Nan Fung's May 30 announcement that it acquired a lot of land for the development of a commercial complex of 1.9 million square feet of gross floor area (GFA) in Kai Tak District, Kowloon East, Hong Kong, for HK$24.6 billion.

"The change in outlook reflects Moody's concern over the impact of the Kai Tak project on Nan Fung's cash buffer," Stephanie Lau, Moody's vice president, senior analyst and lead analyst for Nan Fung, said in a news release.

"Moreover, the acquisition could signal a change in the conservative business strategy that supports the company's Baa3 rating."

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