Fitch slashes Modern Land

Fitch Ratings said it slashed Modern Land (China) Co., Ltd.’s long-term foreign- and local-currency issuer default ratings to C from B. The agency also downgraded its senior unsecured rating and the rating on its outstanding bonds to C with an RR6 recovery rating from B with an RR4 recovery rating.

The downgrades follow Modern Land's announcement of the start of a consent solicitation to extend the maturity of $250 million of senior notes due Oct. 25, by three months to Jan. 25, 2022, Fitch said. The company is also seeking to shorten the notice period for the optional redemption of the bond and to redeem $87.5 million of the principal of the bond

“Fitch considers the extension of the bond maturity by three months a distressed debt exchange (DDE) as per its criteria. If the proposed consent solicitation is successfully completed, the IDR will be downgraded to RD (Restricted Default) and Fitch will then re-rate Modern Land's IDRs to a level that is consistent with the company's post-consent solicitation capital structure and risk profile, which would likely be within a very low speculative-grade range,” the agency said in a press release.

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