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S&P downgrades Evergrande
Standard & Poor’s said it lowered the long-term corporate credit rating on Evergrande Real Estate Group Ltd. to B+ from BB-.
S&P also said it lowered the long-term Greater China regional scale rating on the company to cnBB- from cnBB.
The agency also said it lowered the long-term issue rating on the company’s senior unsecured notes to B from B+, along with the Greater China regional scale rating to cnB+ from cnBB-.
The outlook is negative.
The company’s financial position has deteriorated more than expected following the release of its 2014 annual results, S&P said, and there is no significant improvement expected over the next 12 months.
Evergrande’s leverage has weakened with the debt-to-EBITDA ratio rising to 8.92x as of Dec. 31, 2014 from 5.8x a year earlier, the agency said.
The company’s aggressive growth appetite and debt-funded expansion is expected to keep its leverage high over the next 12 months, S&P said.
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