China Vanke's shares opened 1% lower in Hong Kong on Tuesday following Moody's announcement that the property company's rating is now under consideration for junk status.
The Shenzhen-listed shares also saw a 0.6% decline. Moody's withdrew Vanke's 'Baa3' rating, the lowest of its investment grade ratings, on Monday, placing all of Vanke's ratings on "review for downgrade."
Vanke responded by stating to Reuters that its "current operation and refinancing are normal, and financing channels are stable." The company asserted that the impact of a ratings downgrade on its financing activities is "controllable."
In Hong Kong, the Hang Seng Index (.HSI) was up 0.2%, while the Hang Seng Mainland Property Index (.HSMPI) and China's CSI300 Index (.CSI300) both experienced a 0.1% decline in early Tuesday trading.
Moody's decision followed Reuters' report on Monday that China had urged banks to increase financing support for state-backed Vanke and encouraged creditors to consider extending private debt maturities.
Vanke faced significant selling pressure last week amid reports of financial stress and requests for debt maturity extensions. The company assured Reuters on Friday that it had deposited the necessary funds to repay $630 million U.S. dollar notes due on Monday.
As a government-backed entity, Vanke is 33.4% owned by Shenzhen Metro, a company under the control of Shenzhen's state asset regulator.
Paraphrasing text from "Reuters" all rights reserved by the original author.
