China Business Network (CBN) recently reported that, in the past couple of months, Moody’s downgraded 24 Chinese non-financial companies. These companies are mainly in the fields of transportation, real estate and automobile manufacturing. Seven of the transportation companies now have a negative outlook and the ratings of all five automobile manufacturers were lowered. Among the 24 companies, 17 also have China’s domestic ratings and 16 of them remained unchanged. These companies are typically large enterprises and the new development will hurt their capacity to issue bonds, especially overseas bonds. However, under the global pandemic environment, companies can hardly maintain a good posture, so we are in a time of competition for the title of not-too-bad. Chinese ratings agencies have a long reputation for overrating companies, so established international ratings agencies like Moody’s are more trustworthy.
Source: CBN, April 28, 2020