Moody’s cuts China Overseas Grand

Moody's Ratings said it downgraded to Baa3 from Baa2 China Overseas Grand Oceans Group Ltd.'s (COGO) issuer rating and the senior unsecured rating on the bonds issued by its wholly-owned financing vehicle, China Overseas Grand Oceans Fin IV Cayman Ltd. and guaranteed by COGO.

The agency said it also revised the outlooks for the entities to stable from negative.

"The downgrade reflects our view that COGO's weakened credit metrics are unlikely to recover to levels commensurate with its previous stand-alone credit profile," said Cedric Lai, a Moody's Ratings' vice president and senior analyst, in a press release.

The agency expects COGO’s EBIT/interest and adjusted debt/EBITDA to hover at around 3.5x and 5.8x-5.9x, respectively, over the next 12-18 months.

"The stable outlook reflects our expectation that COGO's contracted sales and credit metrics will stabilize along with good liquidity to manage against the uncertain market environment over the next six to 12 months," added Lai, who is also the lead analyst for COGO.

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