Dow Jones Newswires: Sunac China shares slide after downgrade by Moody’s

Moody’s Investors Service downgraded Sunac’s corporate family rating to B1 from Ba3 late Friday, which it said reflects the developer’s reduced liquidity buffer due to limited funding access and weaker operating cash flow. It also changed its rating outlook to negative from stable.

“The negative outlook reflects potential further weakening in the company’s operating and financial performance over the next 12-18 months amid a challenging operating environment,” the ratings firm said.

Sunac has $1.2 billion of offshore bonds maturing this year, but the chances that it can refinance the debt by issuing bonds at a reasonable cost over the next six to 12 months are low, Moody’s said. It forecasts Sunac’s contracted sales will fall over the same period, weighed down by weak home-buyer confidence and decreased saleable resources after its project disposals.

Some smaller Chinese developers were sharply lower after releasing their most recent sales data late Friday. China Aoyuan Group Ltd. shed 9.1% after January contracted sales lost more than 80% from a year earlier. Shimao Group Holdings Ltd. skidded 7.5% following a 62% slump in January sales.

Write to Clarence Leong at [email protected]