Moody's downgrades Ronshine

Moody's Investors Service said it downgraded to B2 from B1 the corporate family rating of Ronshine China Holdings Ltd., and to B3 from B2 the senior unsecured ratings.

The outlook remains stable.

“The downgrade of Ronshine's ratings reflects our expectation that the company’s profitability and key credit metrics in the next 12-18 months will stay at weaker levels than that of its B1-rated Chinese property peers, given its high land acquisition costs,” said Kelly Chen, a Moody's assistant vice president, in a news release.

“At the same time, we expect the company's liquidity buffer to decline, driven by difficult operating conditions in China's property market, as well as the likely settlement of its unpaid land premium and some debt repayments in the next 6-12 months.”

However, Moody's said it expects the company to maintain adequate liquidity over the next 12-18 months, which underpins the stable outlook on the ratings.

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