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The potential downgrades could have significant implications, as both companies currently hold investment-grade ratings. A downgrade could impact their borrowing costs and investor sentiment, potentially exacerbating the existing crisis in the sector.
This announcement follows a series of ratings actions by Moody’s last week, including a downward revision of its overall sector view. These actions underscore the widening impact of the debt crisis in China’s real estate sector.
The review by Moody’s marks another indication that the crisis is broadening, affecting not only individual companies but also the overall health and stability of China’s real estate market. The global credit rating agency’s decision to place these two firms under review for possible downgrade is a clear reflection of these escalating concerns.
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