Fitch trims Yuzhou Group

Fitch Ratings said it trimmed Yuzhou Group Holdings Co. Ltd.'s long-term foreign-currency issuer default rating to B from B+. Fitch also downgraded the company's senior unsecured rating and the ratings on its outstanding U.S. dollar senior notes to B from B+ with an RR4 recovery rating.

The agency removed all the ratings from under criteria observation, following the publication of its updated corporate rating criteria.

“The downgrade reflects Yuzhou's weakened funding access, rising liquidity pressure due to sizable short-term capital-market instrument maturities, equivalent to around 16% of CNY 44.3 billion of onshore and offshore capital-market debt outstanding as of June 2021, and diminishing financial flexibility to maintain a stable business profile,” Fitch said in a press release.

Citing the slowdown in China’s property market, the agency also noted the uncertainty over Yuzhou's liquidity and the stability of its sales proceeds in the next six-12 months.

The outlook is negative.

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