Moody's downgrades Country Garden

Moody's Investors Service said it downgraded Country Garden Holdings Co. Ltd.'s corporate family rating and senior unsecured rating to Ba2 from Ba1.

"The downgrades reflect Country Garden's weaker-than-expected contracted sales performance and our expectation that the company's financial metrics and liquidity buffer will weaken further in the next 12-18 months, driven by its shrinking contracted sales and margins amid difficult market conditions. The company's high exposure to low-tier cities will also weigh on its operating challenges due to the weaker economies and housing demand there," said Kaven Tsang, a Moody's senior vice president, in a press release.

The agency said it estimates the company's gross profit margin, excluding impairment loss, will range from 12.5%-13% for 2022 and 2023, down from its previous estimate of around 15%.

The outlook remains negative.

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