Greenland Holding Bonds Drop to March Low After S&P Cut to Junk

  • Developer's 5.875 percent notes due 2024 slid to 96.7 cents
  • Hong Kong unit shares dropped 2.2 percent, set for April 8 low

Greenland Holding Group Co.’s dollar bonds fell to the lowest in more than seven weeks after S&P Global Ratings cut its rating on the Chinese property developer to junk last week.

The firm’s 5.875 percent notes due 2024 slid 0.6 cent to 96.7 cents, the lowest since March 10, according to data compiled by Bloomberg. The 4.375 percent securities due in 2017 of its Hong Kong-listed unit Greenland Hong Kong Holdings Ltd. declined 0.38 cent, in the sharpest decline since April 20, to 99.9 cents. The subsidiary’s shares dropped 2.2 percent to HK$2.69 as of 10:51 a.m. in Hong Kong, set for the lowest close since April 8.

S&P cut its rating on Greenland Holding to BB, two steps below investment grade, from BBB-, saying that the group’s "leverage has weakened materially," according to an April 29 statement. It also lowered its score on Greenland Hong Kong further into junk territory at BB- from BB+.

"We believe Greenland Group’s weakened financial risk profile will have a material impact on Greenland HK’s credit profile, given the subsidiary’s reliance on parental support," S&P said in the statement. "We revised our assessment of Greenland HK’s liquidity to less than adequate from adequate because the company has an increasing amount of debt due this year. We expect the company’s cash sources to be less than 1.2 times cash uses over the next 12 months without any new funding."

Two calls to Greenland Holding’s press office went unanswered.

— With assistance by Judy Chen, and Lianting Tu

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