S&P drops Evergrande, notes

Standard & Poor's said it lowered its long-term corporate credit rating on Evergrande Real Estate Group Ltd. to BB- from BB.

The outlook is negative.

At the same time, the agency lowered its long-term Greater China regional scale rating on Evergrande to cnBB from cnBBB-.

S&P also lowered the issue rating on the company's outstanding senior unsecured notes to B+ from BB- and the Greater China regional scale rating to cnBB- from cnBB+.

All ratings were removed from CreditWatch, where they were placed with negative implications on Jan. 27.

"We lowered the rating on Evergrande because the company's financial strength, particularly leverage, has weakened more than we expected," said S&P credit analyst Matthew Kong said in a news release.

"We anticipate that the leverage will further deteriorate over the next 12 months because Evergrande is likely to continue to make large debt-funded land acquisitions. We have therefore revised our assessment of Evergrande's financial risk profile to highly leveraged from aggressive."

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