S&P on Friday cut Vanke’s long-term issuer rating to CCC- from CCC and likewise lowered the long-term issue rating on senior unsecured notes of its Hong Kong subsidiary, marking the second downgrade for the developer in less than a month.
All ratings were placed on CreditWatch with negative implications, it said.
“Over the next six months, the company faces a sizeable bond maturity wall while operating cash flow will be negative, and its accessible cash buffer will likely be thin,” the ratings firm said.
“The company’s debt obligations are currently vulnerable to risks of non-payment or distressed restructuring,” it added.
The downgrade followed a media report earlier this week saying the Shenzhen-based developer could be asked to adopt more “market-oriented” measures to handle its debt, implying that the firm may face a restructuring.
