Moody’s has sounded alarm bells by downgrading Yestar Healthcare Holdings’ corporate family holding (CFR) and senior unsecured rating to Caa1 from B3 while maintaining a negative outlook. Yestar had indicated concerns on the negotiation with its lenders and bond holders for the $200mn senior notes maturing in September 2021 during its 2020 results on April 7 and has appointed Admiralty Harbour Capital as its financial advisor for the debt. Yestar’s cash balance of RMB587mn (US$71mn) reported as on Dec 31, 2020 is inadequate to cover its $200mn bonds due Sep 2021. The rating agency expects short term debt to increase to fund its upcoming requirements. According to the rating agency the Chinese medical product investing holding company’s “CFR is constrained by its moderate size, high supplier concentration, large repayment and working capital needs over the next 12 months and weak financial management”. Gerwin Ho, a Moody’s Vice President said “The downgrade to Caa1 and negative outlook reflect Yestar’s higher probability of default given its increased liquidity risk, with a USD200 million bond due in September 2021,”. “. Though Yestar’s 6.9% 2021s were up 2.94 these are still trading at distressed levels of 45.94.