Pitch, Subsidiary of Zhongbiguoyuan Downgraded to 'Junk' Credit Rating

On the 17th, a sign reading "Protection of Country Garden Homebuyers' Rights" was placed on a vehicle near a construction site on the outskirts of Beijing, operated by the large Chinese real estate company Country Garden (Biguiyuan). [Image source=Yonhap News]

International credit rating agency Fitch has downgraded the credit rating of Country Garden's real estate management subsidiary, Country Garden Services Holdings, to 'junk (speculative grade)'.

According to AFP and other sources on the 23rd (local time), Fitch announced that it would lower the credit rating of Country Garden Services Holdings, a subsidiary of Country Garden facing a default crisis, from BBB- to BB+.

Fitch pointed out that the growth, brand reputation, profitability, and access to funds of Country Garden Services Holdings could be negatively affected by the increasing liquidity pressure faced by Country Garden.

Earlier, on the 18th, the Hang Seng Index Company announced through a disclosure that it would exclude Country Garden Services Holdings from the Hang Seng Index, the representative index of the Hong Kong stock market, starting from the 4th of next month.

The stock price of Country Garden Services Holdings has plummeted by 72% this year alone.

Country Garden is facing a severe default crisis. On the 7th, it failed to pay interest of $22.5 million (approximately 30 billion KRW) on two bonds with a face value of $1 billion that matured, and announced losses of up to $7.6 billion (approximately 10.1 trillion KRW) in the first half of the year.

As Country Garden's liquidity crisis deepens, there are analyses that it could also trigger a crisis in China's financial system and economy.

This content was produced with the assistance of AI translation services.