Moody’s moves Country Garden view to negative

Moody’s Investors Service said it revised its outlook for Country Garden Holdings Co. Ltd. to negative from stable and affirmed its Baa3 ratings.

"The negative outlook reflects our expectation that Country Garden's property sales and profit margins will decline over the next 12-18 months, and offshore funding access will weaken amid difficult operating and funding conditions across the sector," said Celine Yang, a Moody's vice president and senior analyst, in a press release.

Specifically, the agency said it is sees attributable contracted sales falling 15%-20% to around RMB 420 billion–RMB 450 billion over the outlook period, after dropping 2% to RMB 558 billion in 2021.

Moody’s also noted the volatility in Country Garden’s bond prices and said the company will probably have to use internal resources to repay debt due in the next three to six months. The issuer’s 4¾% senior unsecured notes are due in July.

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