Moody's trims China Overseas Land

Moody's Ratings said it downgraded China Overseas Land & Investment Ltd.'s (COLI) issuer rating to Baa2 from Baa1. The agency also lowered the backed senior unsecured rating on China Overseas Finance (Cayman) VIII Ltd.'s medium-term note program, which is guaranteed by COLI, to (P)Baa2 from (P)Baa1.

Additionally, Moody’s trimmed the backed senior unsecured ratings on the bonds issued by China Overseas Finance (Cayman) III Ltd., China Overseas Finance (Cayman) V Ltd., China Overseas Finance (Cayman) VI Ltd., China Overseas Finance (Cayman) VII Ltd. and China Overseas Finance (Cayman) VIII Ltd., which are guaranteed by COLI, to Baa2 from Baa1.

Moody's Ratings concurrently revised the outlooks on all the entities to stable from negative.

"The downgrade reflects our view that COLI's credit metrics will not likely recover to levels appropriate for its previous rating amid the prolonged downcycle in China's property market," said Kaven Tsang, a Moody's Ratings senior vice president, in a press release.

The agency projects COLI's EBIT/interest and adjusted debt/EBITDA will stay at 5x-5.5x and around 5.5x, respectively, over the next one to two years.

"The stable outlook reflects our expectation that COLI will continue to outperform the market in terms of contracted sales, as well as stabilize its credit metrics with strong liquidity to support its current rating and withstand the challenges associated with the uncertain operating environment over the next six to 12 months," Tsang added.

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