Today’s new Evergrande is Ronshine:
Fitch Ratings has downgraded China-based homebuilder Ronshine China Holdings Limited’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B’, from ‘B+’. The Outlook is Negative. Fitch has also downgraded the senior unsecured rating and the rating on Ronshine’s outstanding US dollar senior notes’ to ‘B’, from ‘B+’, with Recovery Ratings remaining at ‘RR4’. Fitch has removed all the ratings from Under Criteria Observation (UCO), on which they were placed on 20 October 2021.
The downgrade and Negative Outlook reflect uncertainty over Ronshine’s refinancing of significant offshore and onshore bond maturities up to 2022, in light of capital-market volatility and tight funding conditions. Ronshine will need to repay the bonds with its own cash if its capital-market access remains limited. It also reflects our view that there are uncertainties over Ronshine’s margin recovery, which was slower than we expected in 1H21.
