Fitch downgrades Guangzhou R&F Properties
Fitch has downgraded Guangzhou R&F Properties’ rating as the company is near default after exchanging a distressed debt.
South Korea.- Fitch has downgraded Guangzhou R&F Properties rating from B- to C and Moody’s has downgraded the company to Caa2. Moody’s also downgraded R&F Hong Kong to Caa3.
Guangzhou R&F Properties is building the Midan City Resort Complex integrated resort in South Korea. It was in partnership with Caesars Entertainment Caesars backed out of the project in February, selling its entire 50 per cent stake to its former partner. The complex will include a casino, 750 hotel rooms, a theatre, and a convention space.
According to Asian Gaming Brief, Alfred Hui, Moody’s analyst, said: “The negative outlook reflects the company’s weak liquidity with high uncertainties over its ability to generate enough cash flow to repay its maturing debts over the next 6-12 months amid challenging operating and funding conditions, despite the company’s plans to accelerate property sales and asset disposals.”
Prior to this downgrade, Guangzhou R&F announced that it had initiated a tender offer and consent solicitation to reduce the price payable for the principal of its $725m senior notes due on January 13, 2022, or to extend the maturity date of the notes. In September, the company received an HKD8bn (US$1.03bn) loan from two major shareholders to address short-term obligations.
