S&P alters Yanlord view to negative

S&P said it changed the outlook for Yanlord Land Group Ltd. to negative from stable.

“We revised the outlook to negative to reflect our view that Yanlord's weakening profitability and aspirations to further expand its scale may not allow it to substantially deleverage in the next 12 months. The company's strong sales execution will temper this risk,” S&P said in a press release.

S&P forecasts Yanlord achieving contracted sales growth of more than 20% per year during 2020-2021. “Executing on this strategy requires the company to increase investments and operating cash outflow, which could dent the company's aggressive debt reduction plan,” the agency said.

S&P said it does see the company reducing its leverage albeit, slower than it had originally estimated.

The agency affirmed the BB- long-term issuer credit rating on Yanlord and the B+ long-term issue rating on its guaranteed outstanding senior unsecured notes.

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