S&P Global Ratings affirmed the CCC+ long-term corporate credit rating of Sunshine 100 China Holdings Ltd., with a negative outlook.
The rating agency also removed the company from its CreditWatch Negative list after it refinanced its existing US$215 million offshore senior unsecured notes with new $235 million notes due 2020.
The action mirrors its views that the property developer's "weak" operating performance, high leverage and liquidity constraints are unsustainable in the long term. Sunshine's capital structure inculcates 29% debt due within a 12-month period and reflects a cash to short-term debt ratio of less than 0.5x, according to the report by S&P.
Meanwhile, its negative outlook suggests that Sunshine's liquidity will stay weak in the next 12 months owing to its large short-term debt maturities, callable onshore corporate bonds and low cash level.
The rating agency further expects the company to continue the disposal of projects in the next one to two years, with the divestment of quality projects diminishing future cash flows.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.