Fitch Ratings lowered Longfor Group Holdings' (HKG:0960) long-term foreign currency issuer default rating, senior unsecured rating and outstanding senior note ratings to BB from BB+, according to a Wednesday release.
The downgrade was due to the China-based homebuilder's narrower liquidity amid a decline in sales and cash flow generation, Fitch said.
The rating agency still sees the company's liquidity as adequate, with free cash flow estimated to hit positive in H2 and 2025.
The outlook is negative, reflecting the likelihood of a longer stabilization period for sales even with new assistive government policies.
The company's ratings still benefit from solid investment property-backed bank funding access and increasing recurring income, Fitch said.
Lower contracted sales or free cash flow generation, an erosion in the investment property segment's operations, and restricted liquidity or funding access could lead to negative rating actions in the future, Fitch said.
Price (HKD): $12.26, Change: $-0.46, Percent Change: -3.62%
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