Fitch downgrades Wanda Commercial to "restricted default", then upgrades to "CC"

Wanda Hotel Development

21/12/2023 08:48

HONG KONG, Dec 21 (Reuters) - Fitch Ratings downgraded
Dalian Wanda Commercial Management Group to "restricted default
(RD)" from "C" on completion of the distressed debt exchange,
and simultaneously upgraded the firm to "CC" from "RD" to
reflect its post-restructuring profile.
    Fitch said in a statement on Thursday the same rating
actions also applied to Wanda Commercial Properties (Hong Kong)
Co. Limited, also a unit of Dalian Wanda Group, China's largest
commercial property developer.
    Wanda Properties last week got official approval to extend
the maturity date of its $600 million 7.25% note to Dec. 29,
2024, from Jan. 29.    
    It also avoided an immediate repayment of more than $4
billion to its investors, which include private equity investor
PAG, after reaching an agreement with them for them to reinvest
in unit Zhuhai Wanda at the end of the year after they were paid
back on their original stake. 
    "We believe that the margin of safety from Wanda
Commercial's liquidity in 2024 is still low, as there are still
execution risks related to getting pre-IPO investors to agree to
a new arrangement," Fitch said in the Thursday statement.
    "(But) once the pre-IPO refinancing is completed as planned
by the company, Wanda Commercial will have sufficient liquidity
to repay the remaining bond maturities," Fitch said, adding it
may consider positive rating action to reflect the latest
capital structure.

 (Reporting by Clare Jim; Editing by Susan Fenton)
 ((clare.jim@thomsonreuters.com;))