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S&P downgrades Guorui Properties ratings

S&P Global Ratings downgraded Guorui Properties Ltd.'s ratings, with a negative outlook.

Specifically, the rating agency lowered the China-based property developer's long-term issuer credit rating to B- from B and the long-term issue rating on its senior unsecured notes to CCC+ from B-.

S&P said the downgrade takes into account Guorui Properties' high debt leverage, which is worse than the rating agency's expectation and is not likely to improve substantially in the next 12 months. As at the end of June, the company's short-term debt was 16.8 billion yuan, whereas it has only 1.8 billion yuan of cash and bank deposits, according to the rating agency.

S&P believes the developer's ability to service debt will be largely reliant on its proceeds from contracted sales over the next 12 months.

The negative outlook factors in S&P's opinion that Guorui Properties has high refinancing risk over the next six to 12 months, especially for its offshore senior notes.

As of Sept. 7, US$1 was equivalent to 6.84 yuan.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings document referred to in this news brief can be found here.