Greenland Holdings was cut to B2 from Ba3 by Moody’s on the back of increasing refinancing risks over the next 6-12 months. Moody’s considers Greenland’s liquidity weak due to declining contracted sales and operating cash flow and large bond maturities add to its risks. Its weak liquidity is also evident in its total cash falling 37% YoY to RMB 65.7bn ($9.7bn) as of the end-March 2022. Contracted sales is expected to fall 30% in the next 6-12 months, having already fallen 56% YoY in Q1 2022 to RMB 30.8bn ($4.5bn). Its total cash/short-term debt ratio is estimated to have declined to 68% from 94% from 2020. Besides, weak capital market access and depletion of its internal cash to meet refinancing needs weigh on the company. While Greenland Holdings may use proceeds from asset disposals to repay its maturing debt, the timing of asset sales is uncertain. This is due to the weak market sentiment and tight funding conditions in China.

Greenland’s dollar bonds were trading stable with its 2022s at 85 cents cents on the dollar, 2023s at over 60 cents and 2024s at 51 cents.

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