S&P turns Central China view to negative

S&P said it revised its outlook for Central China Real Estate Ltd. and affirmed the B+ issuer and senior notes ratings.

“The negative outlook reflects our view that CCRE will face operational and financial challenges in the next year. While Henan's economic rebound post-Covid has lagged other provinces and a recovery from the major flood in July could take time, CCRE has recently lowered its contracted sales guidance for 2021 to Chinese renminbi (RMB) 70 billion from RMB 80 billion. We believe CCRE will also need to prioritize its short-term offshore maturities and will likely repay using internal resources due to market volatility. This will likely be at the expense of construction and land spending, taking resources away from business expansion needs,” S&P said in a press release.

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