Moody's downgrades Yuzhou

Moody's Investors Service said it downgraded Yuzhou Group Holdings Co. Ltd.’s corporate family rating to Ca from Caa2, and the company's senior unsecured ratings to C from Caa3.

On Tuesday, Yuzhou reported it failed to make interest payments for three series of its notes and the distribution on its senior perpetual securities after the grace periods expired. Prospect News reported the securities holders may demand immediate repayment of the principal and accrued interest or take other actions, under their respective indentures.

"The downgrade reflects our expectation of weak recovery prospects for Yuzhou's bondholders following its interest payment defaults," said Daniel Zhou, a Moody's analyst, in a press release.

The outlook remains negative.

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