S&P trims E-House

S&P said it lowered its long-term issuer credit rating and issue ratings on E-House (China) Enterprise Holdings Ltd. to BB- from BB.

“We downgraded E-House to reflect a spike in leverage that will unlikely turn around substantially in the next one to two years. This is partly due to the blow from the Covid-19 outbreak on E-House's primary real estate agency business and debt expansion that is faster than we had expected,” said S&P in a press release.

The downgrade also reflects the expectation E-House's operating cash flow continued to be negative in 2019. “We expect the deficit to be mainly due to the company's investment into its network brokerage business ‘Fangyou’ via advance commission payments to network participants and high "concession money" it pays to developers to secure projects,” S&P said.

The outlook is stable.

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