(Reuters) – Rating agencies Fitch and S&P Global downgraded property developer China Vanke on Monday, as the company sinks further into a liquidity crunch within a struggling property sector in China.
Both rating agencies slashed Vanke’s ratings by two notches to ‘B-‘ from ‘B+’, citing the company’s eroding financial flexibility and an uncertain sales outlook for 2025.
Fitch, which downgraded the property giant for the fourth time in 11 months, said the decline in China Vanke’s sales and cash flow is weakening its ability to handle significant debt maturing in 2025.
S&P Global in its latest downgrade said that it believes China Vanke’s access to cash is weaker than it previously expected.
Last Friday, ratings agency Moody’s had also slashed Vanke’s rating to ‘Caa1’ from ‘B2’.
“Although the company continues to maintain some funding access through raising long-term secured financing from onshore banks, its financial flexibility has eroded as more assets became encumbered,” Moody’s analyst Roy Zhang said in a statement.
The series of downgrades on China Vanke, which is $45 billion in debt, also follows recent media reports on the alleged detainment of its CEO Zhu Jiusheng last week.
(Reporting by Raechel Thankam Job; Editing by Savio D’Souza and Eileen Soreng)
