Hong Kong – Fitch Ratings said Thursday that it will stop rating the troubled property developer China Evergrande Group and two of its subsidiaries because those companies have stopped taking part in the rating process.
In December, the rating agency downgraded Evergrande and its subsidiaries, Hengda Real Estate Group Co. Ltd. and Tianji Holding Ltd., to a status called “restricted default” because the companies had not met their offshore bond obligations.
Fitch said in a statement on Thursday that it would no longer have enough information to keep the ratings on Evergrande and two of its subsidiaries. Evergrande is the most indebted developer in the world, with more than $300 billion in debt.
“As a result, Fitch will no longer rate or analyze Evergrande and its subsidiaries,“ the company said.
Evergrande has had a hard time paying back suppliers and finishing housing projects. Because of this, it has become the face of China’s property sector crisis as it has missed one deadline after another for paying debts in other countries.
As the company struggles to get back on its feet, it is thinking about paying back offshore public bondholders who are owed about $19 billion with cash payments and shares in two of its Hong Kong-listed units. This was reported by Reuters last month.
Its $22.7 billion in offshore debt, which includes loans and private bonds, is considered to be in default because it didn’t make payments when it was supposed to at the end of last year. In March, it said that it would show a first plan for reorganizing its debt by the end of July.
Late last year, rating agencies like S&P put Evergrande in “selective default” because it didn’t pay its offshore debt.