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Bond Market News
Wanda Downgraded by Moody’s
July 7, 2023
Dalian Wanda Commercial Management (DWCM) was downgraded to B1 from Ba2 and Wanda Commercial Properties (HK) was cut to to B3 from B1. Also, the senior unsecured ratings on the bonds issued by Wanda Properties Global, Wanda Properties Overseas and Wanda Properties International were downgraded to B3 from B1. The above three are wholly-owned subsidiaries of Wanda HK. The rating action came on the back of “deteriorated access to funding” that is expected to reduce the company’s liquidity buffer over time. Moody’s notes that its funding access has materially weakened due to “contagion risk and negative news surrounding its parent”. They note that while DWCM’s liquidity is adequate currently, its buffers have come down thanks to repaying over $1bn equivalent of onshore notes in Q2. Wanda now have to look at new secured funding avenues that typically carry a shorter tenor and higher funding costs as compared to bank loans. DWCM is also under pressure to list its commercial property management subsidiary, Zhuhai Wanda Commercial Management Group by end-2023, failing which it would have to return its pre-IPO funding. Execution risks remain a concern especially it terms of raising liquidity amid weak market sentiment, particularly towards the Chinese property sector.
Wanda’s dollar bonds were trading weaker – its 6.875% 2023s due on July 23 was down 1.1 points to 93.75.
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