Moody’s turns Gemdale view to negative

Moody’s Investors Service said it changed its outlook for Gemdale Corp. and its subsidiary Famous Commercial Ltd. to negative from stable.

“Gemdale's year-to-date contracted sales were lower than Moody's previous expectation due to prolonged market weakness. Moody's now forecasts Gemdale's contracted sales will decline to around RMB 220 billion and RMB 200 billion for 2022 and 2023, respectively, versus Moody's previous expectation of around RMB 230 billion and RMB 245 billion. The company's contracted sales fell 37% in the first seven months of 2022 compared with the same period in the prior year due to weak market sentiment and Covid-led disruptions,” the agency said in a press release.

However, Moody’s said Gemdale’s unrestricted cash and operating cash flow should be adequate to cover its maturing bonds.

The agency also the two companies’ corporate family ratings and the Ba3 senior unsecured rating on the bonds and the (P)Ba3 senior unsecured rating on the medium-term note program issued by Gemdale Ever Prosperity Investment Ltd. and guaranteed by Famous.

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