Moody's eyes Chindata for downgrade

Moody's Investors Service said it placed Chindata Group Holdings Ltd.'s Ba2 corporate family rating on review for downgrade. The outlook was stable before the decision to review.

"The review of Chindata's rating for downgrade reflects our view that the company's announced privatization is likely to result in a pro forma capital structure that has meaningfully higher leverage, reduced corporate transparency as a private entity and uncertainties around its future financial policies and business strategy," said Shawn Xiong, a Moody's vice president and senior analyst, in a press release.

Financial sponsor Bain Capital will fund the deal through a cash contribution and debt financing provided by Shanghai Pudong Development Bank Co., Ltd. Lujiazui Sub-branch and Industrial Bank Co., Ltd. Shanghai Branch. Additionally, some existing shareholders will roll over their equity. The deal is expected to close in the fourth quarter of 2023 or the first quarter of 2024.

In its review, the agency will consider Chindata's financial strategy, pro forma capital structure, liquidity profile, and future operating and growth strategy.

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