S&P alters China Evergrande view to negative

S&P said it changed the outlook for China Evergrande, Hengda Real Estate Group Co. Ltd. and Tianji Holding Ltd. to negative from stable. Simultaneously, the agency affirmed the B+ ratings on the three companies and the B long-term issue rating on the U.S. dollar notes issued by Evergrande and guaranteed by Tianji.

“We revised the outlooks to negative because Evergrande’s short-term debt has continued to surge, partly due to its active acquisition of property projects. We had previously expected the company to address its short-term debt, especially given the tough economic climate. In addition, we believe Evergrande will have to repay a portion of its sizable A-share strategic investments. This could further weigh on the company’s weaker-than-peer liquidity profile,” S&P said in a press release.

However, the agency noted the risk of a liquidity crunch is low for now.

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