Moody's reviews Fosun for downgrade

Moody's Investors Service said it placed Fosun International Ltd.’s Ba3 corporate family rating on review for downgrade. The agency also placed the Ba3 backed senior unsecured rating on the bonds issued by Fortune Star (BVI) Ltd. on review for downgrade. Fosun guarantees the bonds.

The agency revised the outlook to ratings under review from stable.

"The review for downgrade reflects our concern that public bond market investors' increasing risk aversion will pressure Fosun's already-tight liquidity and large onshore and offshore debt maturities in the next six to 12 months. The domestic property downturn will also increase credit contagion risk and add liquidity pressure to Fosun's core property subsidiaries," said Lina Choi, a Moody's senior vice president, in a press release.

Analysts will consider Fosun's ability to raise funds, either publicly or through banks to meet its refinancing needs, without substantially increasing its funding costs or shortening its debt maturity profile, how the company conducts its asset divestment plan, and any contagion risk from its property investees, the agency said.

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