S&P downgrades another China property developer, says Evergrande likely to default
|The US rating agency Standard and Poor’s slashed Sinic Holdings’ credit rating to CCC, citing that the firm has not communicated a clear repayment plan timing of any remittance is uncertain.
The global rating agency placed Sinic Holdings on CreditWatch Negative.
Additional takeaways
“Do not expect the Chinese govt to provide any direct support to the Evergrande group.”
"We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.”
"We anticipate Evergrande's direct negative effects on other major players' projects would be manageable, even in a default scenario.”
"We believe the Chinese banking sector can digest an Evergrande default with no significant disruption, although we will be mindful of potential knock-on effects."
Earlier on, S&P ratings said that the indebted Evergrande will likely def, adding that it doesn't expect China's government "to provide any direct support" to the property development group.
Market implications
The risk sentiment is still lagging despite the uptick in the S&P 500 futures, with China out on National Holidays adding to the damp trading conditions.
The S&P ratings’ assessment is likely to add to the market’s concerns, as the Japanese Nikkei 225 index is down over 2%, as of writing.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.