S&P lowers China Jinmao view to negative

S&P said it revised the outlook on China Jinmao Holdings Group Ltd. to negative from stable.

The agency also said it affirmed the BBB- long-term corporate credit rating on China Jinmao and its guaranteed senior unsecured notes.

In line with the outlook revision, S&P said it also is lowering the company’s long-term Greater China regional scale rating and its notes to cnBBB+ from cnA-.

The outlook revision reflects the company's large land acquisitions this year, which were more aggressive than expected, S&P explained.

The high land costs are likely to compress the company's margins over the next 12- to 24-months, the agency added.

The large capital investment for the acquisitions could reduce previously anticipated improvement in the company’s financial leverage, S&P said.

The company’s debt-to-EBITDA ratio is now expected to remain at more than 5x for about the next two years, the agency said.

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