Times China was upgraded by Fitch from C to CC, prompted by the Chinese developer’s timely repayment of coupons on its $350mn 5.75% 2027s and $500mn 6.75% 2023s, before the end of their one-month grace periods. This comes just 9 days after Fitch downgraded the developer to C on its missed interest payments last Tuesday, 2 August. The interest payments were originally due on 14 July and 16 July respectively. Despite the upgrade, Fitch still holds the view that the firm will face mounting liquidity challenges with large maturities due in the next 18 months, including onshore debt of CNY 13.9bn ($2.06bn) and offshore dollar bonds of $1bn. Therefore, Fitch expects Times China to have heightened refinancing risks, compounded by limited access to capital markets and continued sales decline. Contracted sales have fallen 43% YoY since the start of the year and sales in July have dropped 65% YoY to CNY 2.8bn ($420mn), negatively impacting operating cashflows which could be used to service the homebuilder’s debt.
Times China’s 6.75% 2023s inched up 0.75 points to trade at 13.75 cents to the dollar.