Moody's cuts ratings of Chinese developer Country Garden

Ratings agency Moody's on Thursday downgraded Chinese developer Country Garden's corporate family rating to Caa1 from B1, citing heightened liquidity and refinancing risk after the company missed bond payments.

Country Garden expects to record a half-year loss owing to higher impairment provisions on projects, it said on Thursday. Country Garden said on Tuesday that it has missed two dollar bond coupon payments due on Aug. 6 totalling US$22.5 million, slipping into repayment troubles. "The company is also likely to increase its reliance on secured debt because of the deterioration in its credit quality. As a result, the expected recovery rate for senior unsecured claims at the holding company will be lower," Moody's said.

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Analysis:Latest China developer debt woes could spur policy aid, but industry downbeatHONG KONG : News that big developer Country Garden was not able to make $22 million in bond payments is an alarm call for China's government that more private property companies are close to a tipping point if financial support doesn’t materialise soon.As Country Garden was the largest developer in the
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