Moody's lowers Renhe

Moody's Investors Service said it downgraded to B3 from B1 the corporate family and senior unsecured debt ratings of Renhe Commercial Holdings Co Ltd.

The outlook remains negative.

The downgrade reflects doubts that Renhe will be able to sustain its business model due to its track record of weak sales execution and collection of sales proceeds, said Kaven Tsang, a Moody's analyst.

Renhe's book sales of RMB 2.2 billion in 2011 are well below expectation, the agency said.

Renhe has attributed these lower sales to weak purchasing sentiments and a tight bank credit environment, even though its properties are commercial in nature, Moody's said.

Another reason for the downgrade is Renhe's rapid consumption of cash, the agency added.

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