Moody's cuts Evergrande

Moody's Investors Service said it revised the outlook of Evergrande Real Estate Group Ltd.'s B1 corporate family rating to negative from stable.

Moody's also said it downgraded Evergrande's senior unsecured bond rating to B2 from B1 and has assigned a B2 senior unsecured rating to its proposed senior unsecured bonds.

The outlook on the senior unsecured debt rating is negative.

The actions follow news that the company will issue senior unsecured bonds to fund existing and new projects and repay a portion of its onshore bank loans.

The proposed bond will have the same terms and covenants and rank pari passu with the company's existing dollar-denominated bonds due 2015.

The negative outlook reflects Evergrande's increased levels of business and financial risks over the next 12 to 18 months as it pursues a fast expansion, Moody's said.

The agency said it expects the property market and bank credit environment in China to be more challenging.

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