S&P puts VNET on watch

S&P said it placed its B long-term issuer rating on VNET Group Inc. on CreditWatch with negative implications.

“Lack of immediate and substantial progress in raising capital increases refinancing risk for VNET. We estimate the company faces a liquidity shortfall of Chinese renminbi (RMB) 1.3-RMB 1.4 billion. This includes $600 million convertible notes that are puttable in February 2024. The company has some options before the put option matures. It could turn to domestic bank loans, offshore capital markets, other financing channels, and reduction in capital expenditure (capex),” S&P said in a press release.

The agency warned it could cut VNET’s rating by one or more notches unless it makes significant progress on refinancing the $600 million convertible notes by mid-July.

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