Wanda Commercial downgraded to BBB on weaker cash flows
Wanda’s transition to an asset-light business model contains uncertainties, Standard & Poor’s says
Standard & Poor’s Ratings Services has lowered its long-term corporate credit rating on high-profile Chinese property developer Dalian Wanda Commercial Properties to BBB from BBB+.
“The outlook is negative. We also lowered our long-term greater China regional scale rating on the company to cnA- from cnA+,” it said in a press release issued on Wednesday morning. “We removed all the ratings from CreditWatch, where they were placed with negative implications on January 22. “
S&P credit analyst Matthew Kong said: “The downgrade reflects our view that Wanda Commercial’s aggressive expansion appetite to grow its investment property portfolio could result in higher financial leverage over the next 24 months than we had previously anticipated.
“The company’s cash flows are also likely to weaken because the significant reduction in contracted sales will offset the robust growth in rental income.”
Wanda Commercial’s transition to an asset-light business model carried some uncertainty, S&P said.
The company is controlled by the mainland’s richest man, Wang Jianlin.