Two Chinese property companies with major Canadian condominium projects under development were hit with another credit downgrade this week, a sign of their weakening financial position amid China’s property-market downturn.
S&P also reduced China Aoyuan Group Ltd.’s debt assessment this week to B from B+, saying it expected the developer to have a harder time reducing its debt levels.
“We downgraded Aoyuan because we expect its deleveraging pace to slow amid a tough operating environment. The company’s reduced visibility on revenue growth and continued margin pressure will hinder deleveraging efforts,” S&P said.
Like Greenland, Aoyuan is also under pressure to refinance its debt. A significant share of Aoyuan’s debt is maturing next year. S&P said the developer’s debt-reduction plans could include divesting projects.
Aoyuan is working on three major developments in Canada; a project in north Toronto that includes five condo towers and office and retail space; a project in Burnaby, B.C., that also includes five condo towers and office and retail space; and a 44-storey condo building in Surrey.