S&P downgrades Sunac China’s credit rating ahead of looming debt repayment deadlines
- S&P’s downgrade of Sunac’s rating comes a day after a similar move by rival Moody’s, which cited the developer’s heightened liquidity and refinancing risks
- Sunac has asked creditors for a two-year extension on a 4 billion yuan (US$628 million) onshore bond due April 1
The woes of Chinese developers are far from over, with major companies hit by fallout from credit downgrades and their failure to report results on time, forcing many to seek extensions on debt deadlines.
S&P Global Ratings said on Wednesday that it had withdrawn its B- long-term issuer credit rating on Sunac China Holdings, the mainland’s fourth largest developer by sales last year, at the company’s request. The CCC+ long-term issue rating on the senior unsecured notes was also withdrawn.
The ratings withdrawal came after the Beijing-based home builder was downgraded by Moody’s to Caa1 on Tuesday.
“The downgrade reflects Sunac’s heightened liquidity and refinancing risks given the company’s tight funding access amid a challenging operating environment and its large upcoming debt maturities,” said Kelly Chen, an assistant vice-president at Moody’s.
Sunac, founded by chairman Sun Hongbin in 2003, has some US$1.9 billion of offshore bonds, 21 billion yuan (US$3.3 billion) of onshore bonds and sizeable non-bank borrowings due by June 2023, according to Moody’s.