Moody's eyes Country Garden for trim

Moody's Investors Service said it placed Country Garden Holdings Co. Ltd.'s Baa3 issuer rating and senior unsecured rating on review for downgrade. The agency changed the outlook to ratings under review from negative.

"The review for downgrade reflects Moody's expectation that Country Garden's credit metrics will weaken due to a sales decline amid a challenging operating environment, while the company's access to offshore funding will remain restricted over the next 12-18 months. These factors would pressure the company's Baa3 ratings," said Kaven Tsang, a Moody's senior vice president, in a press release.

The agency forecasts Country Garden's attributable contracted sales will drop by around 25% to about RMB 420 billion in 2022 due to China's weak property market. The company's attributed contracted sales fell 37% during the first four months to RMB 121.9 billion because of the challenging operating conditions and Covid-led disruptions during the period.

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