US agency downgrades credit rating of seven Chinese giants

Washington [US] October 21 (ANI): The US credit rating agency Moody's have downgraded the credit ratings of seven Chinese real estate giants due to concerns over liquidity risks.
The ratings of Greenland Holdings, Yango Group, China Aoyuan, Kaisa Group, Shinsun Holdings Group, R&F Properties and Zhongliang Holdings have been downgraded because of poor sales and financing prospects, YICAI reported citing Moody's.
The move has made it difficult for these Chinese companies to borrow money to repay their debts.
"The downgrading of a large number of real estate firms, some of which have relatively large assets, is an indication of the growing deterioration in their [companies'] credit quality," said Yan Yuejin, who is a research director at think tank E-house China R&D Institute.
Although there is still room for policy adjustments, it will take some time for new policies to take effect and boost corporate financial data, Yan added.
These multiple downgrades in rating will affect the financing activities of real estate firms, YICAI reported citing EH Consulting.
This lowered rating outlook directs that the company's financial indicators have deteriorated or are expected to deteriorate.
Meanwhile, Moody's move has also raised concerns about the increase in defaults by Chinese developers. (ANI)