Fitch slashes China Aoyuan

Fitch Ratings said it downgraded China Aoyuan Group Ltd.'s long-term foreign-currency issuer default rating to CCC- from B-. The agency also cut the senior unsecured rating and the ratings on the outstanding dollar-denominated senior unsecured notes to CCC- from B- with an RR4 recovery rating. The ratings have been removed from rating watch negative.

Aoyuan needs to refinance its $688 million of senior notes due in January. The CCC- rating reflects the diminishing likelihood of it refinancing the notes after company extended the redemption date of its Aochuang II asset-backed securities and appointed a financial adviser and a legal adviser, Fitch noted.

Fitch said it estimates Aoyuan has CNY 8.8 billion of public capital-market debt maturing or becoming puttable through to end-2022, including $688 million in senior notes due January 2022 and $200 million becoming puttable in June 2022. The company also has a $250 million bond due and a CNY 1.5 billion bond becoming puttable in September 2022.

“We believe the capital market is largely inaccessible for Aoyuan and it will have to depend on asset sales or internal cash resources to address debt servicing. This is despite Aoyuan demonstrating some access through a CNY 1.8 billion onshore bond issuance in July 2021 and a HK$399 million share placement in October. Its cash/short-term debt of just above 1x may be insufficient to buffer against the currently volatile environment,” Fitch said in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.