Fitch Downgrades Evergrande to 'C'

Fitch downgraded the credit rating to "C" from "CC", the default long-term issuer foreign exchange rating (IDRs) of Chinese homebuilder, China's Evergrande Group, and its subsidiaries, Hengda Real Estate Group Co., Ltd and Tianji Holding Limited. .

Fitch confirmed the top unsecured ratings of Evergrande and Tianji at “C,” with a redemption rating of “RR6,” as well as the unsecured and secured Tianji banknotes issued by Scenery Journey Limited at “C,” with a redemption rating of “RR6.” .

The downgrading reflect that Evergrande likely missed interest payments on its unsecured bonds and entered a 30-day grace period before a non-payment constituted a default event.

Recovery analysis assumes that Evergrande will be liquidated in bankruptcy because it is an asset trading company. We assume that both Hengda and Evergrande will go bankrupt if Evergrande defaults.