Fitch downgrades Evergrande

Fitch Ratings said it downgraded Evergrande Real Estate Group Ltd.’s long-term issuer default rating and senior unsecured debt rating to BB- from BB.

The outlook is negative.

The company’s $750 million senior notes due 2015 also were downgraded to BB- from BB.

The company’s series of large expenditures on land used to adjust its business, new investments and other cash leakages has led to a large increase in its net debts, Fitch said.

As a result, Evergrande’s leverage rose to 57%, breaching the 40% level at which the agency could take negative action on the company’s BB ratings, the agency said.

Prior to 2013, Evergrande relied more on its negative working capital for its expansion, Fitch said.

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