Moody's downgrades Great Wall AMC

Moody's Investors Service said it downgraded the local-currency and foreign-currency long-term issuer ratings of China Great Wall Asset Management Co., Ltd. to Baa1 from A3.

The agency also trimmed the long-term backed senior unsecured medium-term note program rating of China Great Wall International Holdings III Ltd. to (P)Baa2 from (P)Baa1, and its long-term backed senior unsecured debt rating to Baa2 from Baa1.

The entity-level outlook on Great Wall AMC and China Great Wall International is negative. Previously, the ratings were placed on review for downgrade. These rating actions conclude the review for downgrade started on July 5, the agency said.

The downgrades mirror “Great Wall AMC’s weakened profitability, capital position and asset quality due to its large net losses incurred in 2021, as well as the opacity and complexity of the company's business,” the agency said in a press release.

The negative outlook reflects that Great Wall AMC's financial metrics will continue being pressured in the next 12-18 months due to China's slowing economic growth, the plunge in the property market, and disruptions caused by the pandemic. “It also takes into consideration the uncertainty in the timeliness and form of government support for the company,” Moody’s said.

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