Moody's cuts Country Garden to junk

Moody's Investors Service said it lowered Country Garden Holdings Co. Ltd.’s senior unsecured rating to Ba1 from Baa3. The agency also assigned a Ba1 corporate family rating and withdrew its Baa3 issuer rating.

Moody's also changed the outlook on Country Garden to negative from ratings under review. These actions conclude the review for downgrade initiated on May 30.

"The rating downgrade reflects Country Garden's declining property sales and deteriorating financial metrics amidst the challenging operating conditions of the China property sector, as well as its weakened access to long-term funding," said Kaven Tsang, a Moody's senior vice president, in a press release.

“While Moody's expects Country Garden to maintain a strong market position and good liquidity, the negative outlook reflects Country Garden's reducing liquidity buffer and financial flexibility, driven by falling property sales and continued weak market sentiment in the next six to 12 months," added Tsang.

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