Moody's downgrades VNET

Moody's Investors Service said it downgraded VNET Group, Inc.'s corporate family rating to B3 from B2 and changed the outlook to negative from ratings under review. This action concludes the review for downgrade the agency started on Feb. 17.

"The rating downgrade and negative outlook reflect VNET's weak liquidity position in particular given the refinancing task for its $600 million convertible bonds that will become puttable in February 2024, its elevated debt leverage on a sustained basis, and persistent negative free cash flow to fund its business needs," said Shawn Xiong, a Moody's vice president and senior analyst, in a press release.

However, the agency noted over the past three years VNET issued $1.6 billion in convertible bonds, preferred and common shares demonstrating a track record in offshore capital markets.

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