Fitch slashes Hongkun to CCC+

Fitch Ratings said it cut Beijing Hongkun Weiye Real Estate Development Co., Ltd.'s long-term foreign-currency issuer default rating to CCC+ from B. The agency also downgraded the senior unsecured rating on Hongkun and the rating on the outstanding U.S.-dollar senior notes issued by Hongkong Ideal Investment Ltd. to CCC+ from B with the recovery rating remaining at RR4. Fitch removed all the ratings from under criteria observation.

“The downgrade reflects Hongkun's limited access to capital-market funding while it faces refinancing needs in the coming 12 months. It also considers the uncertainty over the stability of the company's sales and sales collection amid a slowdown in China's property market, which could lead to a further deterioration in the company's liquidity and financial flexibility. In addition, refinancing uncertainty may have increased after Hongkun extended the settlement date of its onshore bond that turned puttable on Nov. 22, 2021, by a month,” Fitch said in a press release.

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