S&P cuts Evergrande, units

S&P said it cut China Evergrande Group and its Hengda Real Estate Group Co. Ltd. and Tianji Holding Ltd. to CC from CCC. The agency also slashed the long-term issue rating on the U.S. dollar notes issued by Evergrande and guaranteed by Tianji to C from CCC-.

“We downgraded Evergrande because the company's liquidity appears to be depleted. As such, we believe nonpayment risk is extremely high and could ultimately lead to debt restructuring–meaning a default scenario is a virtual certainty,” S&P said in a press release.

Evergrande is negotiating repayment terms and two of its subsidiaries failed to meet guarantee obligations on wealth management products to retail investors, the agency noted.

The outlook is negative.

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