China based real estate company Sichuan Languang Development has been downgraded to B2 from B1 by Moody’s due to a low liquidity buffer, especially as the company has large upcoming debt maturities in the next 12-18 months. The senior unsecured rating of the company’s notes has also been lowered to B3 from B2. According to the rating agency, the contracted sales of the company are expected to be flat in 2021 and could drop by 8-10% in 2022. The property developer had also pursued a debt funded land replenishment in the last two years that resulted in cash to short-term debt ratio dropping by 19% to 107% at the end of March 2021 vs. 2019. Despite the downgrade, Moody’s expects the company’s cash, together with its operating cash flow, to be sufficient to cover its unpaid land premiums, dividend payments and maturing debts over the next 12 months. Moody’s Vice President and Senior Analyst said “The downgrade reflects Languang Development’s reduced liquidity buffer given its large upcoming debt maturities in the coming 12-18 months amid the tight credit environment in China and volatile capital markets,”.