Fitch cuts Evergrande, units

Fitch Ratings said it downgraded to B from B+ the long-term foreign-currency issuer default ratings of China Evergrande Group and its subsidiaries, Hengda Real Estate Group Co., Ltd. and Tianji Holding Ltd.

The agency also lowered the senior unsecured ratings of Evergrande and Tianji to B- from B with an RR5 recovery rating. The Tianji-guaranteed senior unsecured notes issued by Scenery Journey Ltd. have also been downgraded to B- from B with an RR5 recovery rating.

“The downgrade reflects ongoing pressure for Evergrande to downsize its business and reduce total debt. We believe the company's debt reduction plan is achievable, but it is subject to meaningful execution risk and may also negatively affect the company's business profile in the medium term,” Fitch said in a press release.

Evergrande plans to cut CNY 150 billion by hastening sales, limiting land purchases and selling shares.

The outlook is negative.

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