S&P downgrades Country Garden

Standard & Poor’s said it lowered the long-term corporate credit rating on Country Garden Holdings Co. Ltd. to BB from BB+.

The agency also said it lowered the rating on the company’s outstanding senior unsecured notes to BB from BB+.

S&P also said it lowered the long-term Greater China regional scale ratings on the company and notes to cnBBB- from cnBBB+.

The outlook is stable.

The downgrades are due to its deteriorating margins and leverage, the agency said.

In 2015, the margin compression was greater than expected and leverage notably weakened because of aggressive land acquisitions, S&P said.

The agency added that Country Garden’s leverage is unlikely to recover to levels previously anticipated since the company continues to aggressively acquire land.

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