Ronshine China downgraded to B- from B by Fitch reflecting increasing uncertainty over refinancing of its capital market maturities in H2 2022. While the rating agency believes Ronshine has sufficient liquidity to meet its $394mn 10.5% dollar bond due March 1, 2022, the developer’s capital market access is limited and hence has to rely on cash flows from contracted sales to meet its 2022 maturities. Ronshine has a combined $1.084bn in bond maturities due in 2022. Its ability to replenish land bank especially if its prioritizes debt repayments could hurt its business profile. Also, Ronshine’s non-controlling interest at ~65% of total equity is high among its peers and thereby shows its reliance on capital contributions from non-controlling shareholders to fund expansion, a negative for its overall business profile.
Ronshine’s dollar bonds continue to trade at distressed levels 22-25 cents on the dollar.
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