Powerlong was downgraded to CCC+ from B by S&P due to “considerable refinancing risk”. Powerlong’s repayment plans to meet immediately maturing debts have not made “material progress”, S&P notes, adding that it would lead to an “unsustainable capital structure”. Besides, its asset disposal plan is slower than expected and the delay in releasing its annual results couple with market volatility has only weakened investors’ sentiment. Its contracted sales have fallen to RMB 19bn ($2.8bn) from January-May 2022 , down 55% YoY. The rating agency also notes that there is an increased chance of the developer considering a revision of repayment terms with creditors and potential maturity extensions. Powerlong has has $600mn in dollar bonds and ~ RMB 3.7bn ($550mn) in onshore bonds due or puttable in 2022.
Powerlong’s 4% dollar bonds due in July 2022 dropped 6.9 points to 26.57 cents on the dollar.
