CIFI Holdings was downgraded to Ca/C from B3/Caa1 by Moody’s following its failure to promptly repay interest and amortization payments on an offshore convertible bond due on October 8. As concerns of default on its other debt obligations continue to grow, Moody’s is pessimistic that the Chinese developer will be able to garner sufficient funds to address its upcoming debt maturities. This includes RMB 8bn ($1.12bn) in puttable onshore and offshore bonds by the end of 2023. Moody’s continues to maintain a negative outlook on the company, amid heightened liquidity and default risks, as well as “weakened recovery prospects for the company’s creditors”.
CIFI’s dollar-denominated bonds are currently trading at distressed levels of ~10-15 cents on the dollar.