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Moody : downgrades Glorious to Caa3; outlook negative

04/20/2015 | 11:35pm US/Eastern

[ET Net News Agency, 21 April 2015] Moody's Investors Service has downgraded Glorious

Property Holdings Limited's (00845) corporate family rating to Caa3 from Caa1.

At the same time, Moody's has downgraded Glorious' senior unsecured rating to Ca from

Caa2. The rating outlook is negative.

The downgrade follows (1) the delay in Glorious' announcement of its 2014 results --

which have now been released -- and the fact that its external auditors have issued a

Disclaimer of Opinion based on uncertainty related to the company as a going-concern; (2)

its much weaker-than-expected liquidity and sales performance, and (3) a heightened level

of refinancing risk.

"Glorious' downgrade reflects Moody's concern over the company's high risk of default.

Moreover, its ability to refinance the bond maturing on 25 October 2015 has been weakened

substantially by the set of very poor results for 2014," said Gerwin Ho, a Moody's Vice

President and Senior Analyst.

Glorious reported a year-on-year fall of 45% in contracted sales to RMB4 billion for


The company's cash balance fell to RMB1.4 billion at end-2014 from RMB3 billion at

end-2013, which is insufficient to repay the USD300 million in offshore bonds.

"Given that most of Glorious' debt is secured, we believe the recovery prospects for

offshore bondholders are low and are reflected in its Ca senior unsecured rating," Ho


Furthermore, at end-2014, Glorious was overdue in its repayment of RMB149.6 million in

principal and RMB46.4 million in interest, said the credit rating agency.

This failure to repay on time was seen by its auditors as a cross-default event, leading

to the reclassification of RMB8.6 billion in debt as current liabilities, Moody's noted.


(c) 2015 ET Net Limited. All rights reserved. Provided by SyndiGate Media Inc. (, source Middle East & North African Newspapers

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