Evergrande doom loop intensifies again

Moody’s had downgraded Evergrande, making it a triptych of rating agencies:

Moody’s Investors Service has downgraded the corporate family rating (CFR) and senior unsecured ratings of China Evergrande Group (“Evergrande”), the CFRs of Hengda Real Estate Group Company Limited and Tianji Holding Limited, and the backed senior unsecured ratings of Scenery Journey Limited.

…”The downgrades reflect Evergrande’s heightened refinancing risk over the coming 12-18 months given its weakened funding access and liquidity position. We also expect its profit margins to decline as the company lowers the selling prices of its properties to preserve liquidity,” says Cedric Lai, a Moody’s Vice President and Senior Analyst.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.