S&P cuts Seazen

S&P said it lowered its issuer ratings for Seazen Group Ltd. and its subsidiary, Seazen Holdings Co. Ltd. to BB from BB+ and Seazen Holdings’ senior unsecured notes to BB- from BB.

“We lowered the ratings because Seazen's sales could significantly decline due to its market positioning and weak homebuyer sentiment. We expect the company's sales to decline by 33%-38% to Chinese renminbi (RMB) 145 billion-RMB 156 billion in 2022.

“Seazen's contracted sales dropped by about 44% in the first seven months of 2022 over the same period in 2021. Despite month-on-month sales growth since May with a relaxation of Covid restrictions, poor homebuyer sentiment amid a mortgage boycott dampened property sales in July. Given that over 50%-60% of Seazen's saleable resources are located in lower-tier cities where demand is generally weaker, the company's sales recovery could be slow,” S&P said in a press release.

The outlook is negative.

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