S&P trims Seazen

S&P said it lowered its ratings on Seazen Group Ltd. and its subsidiary Seazen Holdings Co. Ltd. to BB- from BB and the rating on Seazen Holdings’ senior unsecured notes to B+ from BB-.

“We lowered the ratings because Seazen's liquidity buffer has further narrowed due to faltering sales and depleting cash. The company's sales dropped by about 47% year on year in the first 10 months of 2022 amid weak homebuyer sentiment. We expect sales to further weaken in the rest of 2022, with full-year total contracted sales reaching Chinese renminbi (RMB) 119 billion-RMB 121 billion, a 47%-49% drop compared with 2021. Sales will likely remain weak in 2023 due to Seazen's exposure to lower-tier cities, shrinking saleable resources, and land bank,” S&P said in a press release.

The agency noted it revised Seazen’s liquidity to less than adequate from adequate after it repaid about RMB 10 billion of debt in the third quarter of 2022.

On the plus side, the company was chosen as one of the private developers under new government-supportive measures, which will be key to alleviating Seazen's refinancing risk, S&P said.

The outlook is negative.

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