International credit rating agencies have hit struggling Chinese property developers with a record number of downgrades during 2021, as the collapse of China Evergrande Group reverberates around the ailing sector, reports the Financial Times. The downgrades come after Beijing introduced measures last year to cool an overheating property market and a liquidity crisis that is threatening to spread to more trusted borrowers.
Moody’s, Fitch and S&P downgraded Chinese developers’ ratings 43, 54 and 30 times, respectively, in 2021, compared with six, 12 and 11 in 2020, adding further pressure on their ability to refinance offshore debt during a housing slowdown.
A Financial Times data analysis of the biggest borrowers shows that while riskier developers were subjected to significant downgrades in the past year, the ratings of investment-grade companies were largely unchanged. Credit ratings of triple B minus and higher are investment grade, while those below are high yield.