Moody’s trims Wanda Group

Moody’s Investors Service said it downgraded Wanda Group Co., Ltd.’s corporate family rating to B3 from B1. Concurrently, Moody’s placed the rating on review for downgrade and changed the outlook to rating under review from negative.

"The downgrade and review for downgrade reflect the increasingly challenging operating environment facing the refining industry, which in turn is further raising Wanda Group’s already high refinancing risk," said Ying Wang, a Moody’s vice president and senior analyst, in a press release.

"Slower demand growth, excessive industry capacity in China and higher business volatility will heighten operational risk and increase pressure on Wanda Group’s revenue and profitability over the next 12-18 months, reducing the company’s buffer against industry volatility and weakening its liquidity profile," added Wang.

Wanda Group’s refinancing risk has increased over the past 12-18 months, with a large amount of puttable domestic bonds becoming redeemable in 2020. Moody’s said it expects Wanda Group’s credit profile to deteriorate in 2020, as slowing economic growth is weakening Chinese demand for refining and petrochemical products and as excess refining capacity will pressure pricing.

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