Fitch Ratings downgraded its ratings on Chinese property company Tahoe Group Co. Ltd., with a negative outlook.

Specifically, the rating agency lowered Tahoe's long-term foreign-currency issuer default rating to B- from B and its senior unsecured rating to CCC+ from B-.

Fitch said the ratings take into account its opinion that Tahoe's leverage will remain above 70% for the next 18 to 24 months, driven by aggressive land purchases before 2018. Tahoe funded the acquisitions through debt, which led to a heavy interest burden that severely weakens the company's ability to generate operating cash flow.

The rating agency estimates that Tahoe's liquidation value covers only 27% of unsecured debt.

The negative outlook factors in the elevated liquidity risk from the company's poor cash-collection performance.