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.
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