S&P trims Yuzhou Properties

S&P said it downgraded Yuzhou Properties Co. Ltd. to B+ from BB- and affirmed the B- rating on the company’s senior unsecured notes.

“We downgraded Yuzhou to B+ with a negative outlook because the company's leverage is unlikely to recover over the next 12 months after further deterioration in 2019. We affirmed the issue rating at B+ because we believe subordination risk has reduced in Yuzhou's capital structure,” the agency said in a press release.

“We see lower visibility on Yuzhou's revenue recognition, which could affect its prospects for leverage improvement in the next 12 months. This is due to the higher proportion of unconsolidated JV contribution in its contracted sales than we expected,” S&P said.

The outlook is negative.

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