Moody's slashes China Country Garden rating on default risk

Due to concerns that the company might be on the verge of default, Moody's cut the credit rating of Chinese real estate developer Country Garden by three notches, from Caal to Ca, on Thursday. The rating downgrades with negative outlook reflect Country Garden's tight liquidity and heightened default risk, as well as the likely weak recovery prospects for the company's bondholders, Kaven Tsang, a Moody's Senior Vice President, stated. The troubles of Country Garden were also highlighted in a proposed stock offering on Wednesday to help satisfy debt repayments, as well as two missed dollar-dominated coupon payments earlier in the month. The corporation warned on Wednesday of default risks if its financial performance continues to deteriorate, and said it felt deeply remorseful for its record loss in the first half.