“The downgrade reflects a deterioration in China Vanke’s sales and cash generation, which is eroding its liquidity buffer against large capital market debt maturities in 2025,” Fitch analysts said in the report.
The adjustments, Fitch said, also factored in uncertainties about the home builder’s near-term sales performance, its ability to “maintain stable onshore funding access”, as well as the potential fallout from recent media reports about the whereabouts of its top executive. These developments could affect homebuyer confidence and broader market perceptions about the company, Fitch said.
Also Monday, S&P Global Ratings downgraded China Vanke’s bonds two notches to B- on concerns about the company’s liquidity.
“We believe pressure on China [Vanke’s] liquidity has risen, having assessed its access to cash as [being] weaker than we previously expected,” S&P analysts wrote.
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