Ratings agency Fitch Ratings downgraded Dalian Wanda Commercial Management Group to “restricted default (RD)” from “C” following the completion of a distressed debt listing, while also upgrading the firm to “CC” from “RD” to reflect its profile after restructuring.
Fitch said in a statement on Thursday that the same rating action also applies to Wanda Commercial Properties (Hong Kong) Co. Limited, also a unit of Dalian Wanda Group, China’s largest commercial real estate developer.
Wanda Properties last week received official approval to extend the maturity date of its $600 million 7.25% bond to Dec. 29, 2024 from Jan. 29.
It also avoided immediately repaying more than US$4 billion to its investors, which include private equity investor PAG, after reaching an agreement with them to reinvest in the Zhuhai Wanda unit at the end of the year after they were repaid the original amount.
“We think that Wanda Commercial’s liquidity margin in 2024 remains low due to lingering execution risks associated with pre-IPO investors consenting to the new arrangement,” Fitch said in a statement on Thursday.
“(But) once the pre-IPO refinancing is completed as the company plans, Wanda Commercial will have sufficient liquidity to repay remaining bond maturities,” Fitch said, adding that it may consider a positive rating to reflect the latest capital structure.