Fitch places Country Garden on watch

Fitch Ratings said it placed Country Garden Holdings Co. Ltd.'s long-term foreign- and local-currency issuer default ratings and the BBB- senior unsecured bond ratings on rating watch negative.

“The RWN reflects Fitch's expectation of an uncertain recovery in contracted sales and sales collection, as well as increased leverage - measured by net debt/net property assets - amid an industry downturn. The RWN will be resolved upon a sustained recovery in sales or cash collection, without any deterioration in leverage, margin or financial flexibility,” the agency said in a press release.

The agency said it sees contracted sales plummeting by 30% to CNY 390 billion in 2022, from CNY 550 billion-570 billion in 2019-2021. However, sales sentiment is expected to recover in the second half of 2022.

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