Moody's downgrades Tahoe

Moody's Investors Service said it downgraded the corporate family rating of Tahoe Group Co., Ltd. to B3 from B2, along with the backed senior unsecured rating of the notes issued by Tahoe Group Global (Co.,) Ltd. to Caa1 from B3.

The outlook is negative.

The downgrades reflect Tahoe's weak financial management and its heightened debt-refinancing risk over the next 12- to 18-months because of weaker-than-expected cash collections from property sales and high levels of maturing debt also maturing over that time frame, Moody's said.

Tahoe is actively seeking new capital from its existing funding channels and potentially alternative liquidity sources to meet its refinancing needs, the agency said.

If the company fails to secure new financing in the next few months, its ratings will come under further downgrade pressure, Moody's added.

The ratings also consider the company's large business scale relative to many B-rated Chinese developers, long operating history and modestly diversified capital structure, the agency said.

The ratings are constrained by its weak liquidity and high refinancing risk, as well as its weak financial metrics, Moody's said.

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