S&P Downgrades Longfor Group Holdings to BB on Heightened Leverage

MT Newswires Live03-05

S&P Global Ratings lowered Longfor Group Holdings' (HKG:0960) long-term issuer credit rating to BB from BB+, according to a Wednesday release.

The downgrade reflects the property developer's high leverage amid reduced contracted sales and a narrowing profit margin in its property development business.

S&P expects the company's debt-to-EBITDA ratio to remain around 8x through 2025.

The company maintains controlled cash flow management and access to commercial property-pledged loans, which allows it to refinance its obligations.

The outlook is negative, based on the risk of further sales erosion and worsening leverage amid an ongoing industry downturn.

Further shifts in the company's sales and EBITDA interest coverage could lead to future rating actions, S&P said.

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