S&P downgrades Yanlord Land

S&P said it downgraded Yanlord Land Group Ltd. and the rating on its senior unsecured notes to BB- and B+, respectively. The downgrade comes after the completion of the acquisition of United Engineers Ltd.

“The downgrade reflects Yanlord Land Group Ltd.’s elevated leverage following the UEL acquisition. Notwithstanding the company’s expected debt reduction following the deal, it will be difficult for the entity to achieve a prompt recovery in its financial profile commensurate with its original rating. It also reflects an expected deterioration in profitability, because of the company’s exposure to higher market volatility give its niche business focus,” said S&P in a press release.

S&P said it doesn’t expect the company’s leverage to swiftly return to its prior levels of below 4x debt to EBITDA in the next one to two years.

The outlook is stable.

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