S&P slices Sichuan Languang

S&P said it trimmed Sichuan Languang Development Co. Ltd.’s issuer rating to CCC- from B- and guaranteed outstanding dollar-denominated debt rating to CC from CCC+. The agency also removed the ratings from CreditWatch, where they were placed with negative implications on May 31, and assigned a negative outlook.

“We downgraded Sichuan Languang because the company faces high nonpayment risk, given its domestic bonds totaling Chinese renminbi (RMB) 4.2 billion coming due over the next three months, with the first maturity on July 11, 2021. There has been a lack of progress in Sichuan Languang's project disposal plan,” S&P said in a press release.

The outlook, the agency said, also reflects the view Sichuan Languang’s situation will remain strained even if it can sort out the repayment of the domestic bond maturities this year.

“This is because Sichuan Languang still faces offshore maturities of $750 million in the first half of 2022. These are also subject to high risk of nonrepayment if the company's financing conditions have not recovered by year end,” the agency said.

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