Moody’s cut Chinese property developer Agile’s corporate family rating to B1 from Ba2 and its senior unsecured rating to B2 from Ba3. This comes just a day after S&P downgraded Agile to B+ from BB-. Similar to most of the recent rating actions on Chinese developers, Moody’s cited increased refinancing risks owing to upcoming maturities and weakened access to funding as reasons for the downgrade. The rating agency added that it expects “Agile’s liquidity to become inadequate in the next 12-18 months, in the absence of new external financing or funding from asset disposals”. Agile’s bonds are trading at distressed levels with its 4.85% bonds due August 2022 at 34.3 cents on the dollar.
Another Chinese developer, DaFa Properties said that it has not paid $40.4mn of principal and interest on the remaining outstanding amount of its dollar bond that was due on Tuesday. While the non-payment could be a potential event of default under the bond’s offering documents, DaFa said that it would not constitute a default under three of its other dollar bonds. This comes after the company said that $144.1mn of the bonds were validly tendered in its debt exchange that was completed on Monday. DaFa’s 12.375% bonds due July 2022 are trading at 50.75 cents on the dollar.
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