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Beleaguered China Evergrande Group Loses Fitch Rating

Rating agency says China Evergrande and two subsidiaries stopped participating in process, making them impossible to rate.


Fitch rating agency says China Evergrande and two subsidiaries stopped participating in process, making them impossible to rate.
The Evergrande Center in Shanghai. The Chinese real estate behemoth was declared in default on December 9, 2021 by Fitch Ratings agency. Photo: Hector Retamal, AFP.

Struggling property developer China Evergrande Group and two of its subsidiaries, Hengda Real Estate Group Co Ltd and Tianji Holding Ltd, have lost their ratings from Fitch, which said the developers have stopped participating in the rating process.

Fitch downgraded China Evergrande Group and the two subsidiaries to “restricted default” status in December, saying the firms had defaulted on their offshore bond payment obligations.

In a statement, Fitch said it no longer has enough information to rate China Evergrande, the world’s most indebted developer with more than $300 billion in debt, and the two subsidiaries.

“Accordingly, Fitch will no longer provide ratings or analytical coverage for Evergrande and its subsidiaries,” it said.

 

ALSO IN AF: China Evergrande’s Hengda Wins Reprieve on Coupon Payment

 

China Evergrande, which has struggled to repay suppliers and complete housing projects, has become the poster child of China’s property sector crisis as it lurched from one missed offshore debt payment deadline to another.

The firm is considering repaying offshore public bondholders owed around $19 billion with cash installments and equity in two of its Hong Kong-listed units, Reuters reported last month.

Its $22.7 billion in offshore debt, including loans and private bonds, is deemed to be in default after missing payment obligations late last year. Evergrande said in March it will unveil a debt restructuring proposal by the end of July.

Late last year, rating agencies such as S&P downgraded China Evergrande to “selective default” after missed offshore debt payments.

 

 

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.

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