New | China developer Glorious downgraded by S&P over debt

Global ratings agency Standard & Poor's yesterday downgraded China developer Glorious Property Holdings to CC from CCC-minus on increased debt repayment uncertainties, with a negative outlook.

This is the agency's third ratings cuts this year for cash-strapped Glorious over refinancing worries.

Glorious had 1.7 billion yuan of principal and 124 million yuan of interest overdue as of the end of June. It missed repayment on another 1.1 billion yuan in principal and 96 million yuan in interest, the developer announced on Monday.

"We downgraded Glorious because the company disclosed a series of overdue debt repayments that have not been completely remedied or waived," said credit analyst Christopher Yip at the ratings agency.

S&P said it saw a high probability of Glorious defaulting on its US$300 million unsecured offshore notes due next month. Any missed payments could also trigger cross-default clauses for the company's liabilities, particularly on its other offshore notes of US$400 million due 2018.

Glorious said it was in talks with lenders to extend the repayments and would step up efforts, including sales of investment properties, to defend its cash flow.