RIYADH: Chinese homebuilder Evergrande Group and its subsidiaries have had their long-term foreign-currency issuer default ratings (IDRs) downgraded from 'CC' to 'C' by Fitch Ratings.
The struggling company, and its offshoots Hengda Real Estate Group and Tianji Holding Limited, have also been handed a recovery rating of R66.
Evergrande is likely to have missed interest payment on its senior unsecured notes and entered the resulting 30-day grace period before non-payment constitutes an event of default, according to Fitch.
Neither the company nor the trustee has made an announcement about the coupon payment due on 23 September for Evergrande's $2 million of 8.25 percent bonds.
The recovery analysis predicts Evergrande would be liquidated in a bankruptcy because it is an asset-trading company, Fitch said, adding: "We assume both Hengda and Evergrande would go into bankruptcy if Evergrande defaults. We assume a 10 percent administrative claim."
