S&P Global Ratings downgraded Evergrande’s credit rating to selective default after defaulting on a dollar-denominated bond coupon for the first time, Bloomberg reported.
This is a move that could provoke a chain reaction in the course of repaying the debt of 19.2 billion dollars of the Chinese giant.
It should be noted that S&P Global Ratings subsequently withdrew the rating at Evergrande’s request.
Evergrande prioritizes payments to migrant workers and suppliers, as regulators urge the manufacturer to avoid any risk of social unrest, according to those familiar with the matter.
Fitch Ratings was the first to downgrade Evergrande’s credit rating on December 9, under a similar regime.
The Evergrande, considered by many investors to be “too big to collapse”, became the biggest victim of Chinese President Xi Jinping’s campaign to “tame” his country’s over-indebted real estate groups.
The concern has since spread to higher-ranking companies, such as the Shimao Group, as pressure on their liquidity intensifies. It should be noted that Fitch downgraded Shimao Group from BBB to BB.
Its ratings have been put under monitoring for possible degradation.
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Source From: Capital
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