Fitch Ratings placed Chinese conglomerate Huafa on a rating watch negative, raising the possibility of a downgrade from its current BBB investment‑grade score. The agency cited weakening debt‑service coverage, looming debt maturities, and widening bond spreads as the conglomerate faces about $62 billion in debt. Offshore bonds have plunged to record lows, with yuan‑denominated 2027 paper sliding 40% to roughly 59% of face value.
Missed trust‑product payments and requests for loan extensions from Chinese banks underscore the strain. Huafa’s real‑estate arm delayed its third‑quarter earnings, reflecting the broader fallout from China’s prolonged property crisis. The rating agency warned that further financial flexibility erosion, higher borrowing costs, and reduced liquidity could trigger a downgrade, highlighting ongoing credit risks even for state‑linked firms.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing