S&P lowers Country Garden debt

S&P said it reviewed the senior unsecured issue-level ratings on Country Garden Holdings Co. Ltd. that were labeled as under criteria observation (UCO) after publishing its revised issue ratings criteria.

With the criteria review complete, the agency said it removed the UCO designation from these ratings and is lowering the issue rating on Country Garden's senior unsecured debt to BB- from BB.

These rating actions stem solely from the application of the revised issue rating criteria and do not reflect any change in the assessment of the corporate credit ratings on issuers of the affected debt issues.

The rating action takes into consideration Country Garden's capital structure, which consists of RMB 36 billion in secured debt and RMB 62 billion in unsecured debt issued or guaranteed by Country Garden, along with RMB 64 billion in unsecured debt issued by or guaranteed its operating subsidiaries as of Dec. 31, 2016, S&P said.

The senior unsecured notes issued by Country Garden are rated BB-, a notch lower than the corporate credit rating on Country Garden, the agency said.

The notching reflects the significant subordination of these senior unsecured debts relative to other debt in the issuer's consolidated capital structure, S&P said.

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