Fitch revises Dalian Wanda to negative

Fitch Ratings said it revised the outlook on Dalian Wanda Commercial Properties Co. Ltd.'s long-term foreign-currency issuer default rating to negative from stable and affirmed the rating at BBB.

Fitch said the outlook revision reflects its expectation that Dalian Wanda’s fast-paced land acquisitions for new Wanda Plaza projects in the first half of 2016 will weigh on the property developer's financial profile over the next two years.

Dalian Wanda will continue generating negative free cash flow beyond 2017 unless the company can sustain an external funding model to expand its investment properties (IP).

Otherwise, the company will need to increase its leverage as measured by net-debt/adjusted-inventory above 40% (first half 2016: 32.8%), at which point Fitch said it would consider taking negative rating action.

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