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Rating Action: Moody's downgrades CFLD's CFR to Caa3; will withdraw ratingsGlobal Credit Research - 02 Mar 2021Hong Kong, March 02, 2021 -- Moody's Investors Service has downgraded China Fortune Land Development Co., Ltd.'s (CFLD) corporate family rating (CFR) to Caa3 from Caa1.At the same time, Moody's has downgraded to Ca from Caa2 the senior unsecured bonds issued by CFLD (Cayman) Investment Ltd. and guaranteed by CFLD.The outlook on the ratings remains negative.Due to a lack of adequate information, Moody's will withdraw all of the ratings of CFLD and CFLD (Cayman) Investment Ltd. following this rating action."The downgrade reflects our expectations that recovery prospects for CFLD's creditors have weakened, given the company's weak operations and liquidity, as well as its limited debt servicing abilities," says Danny Chan, a Moody's Analyst and Assistant Vice President.The company announced on 27 February 2021 that it had missed RMB11 billion in principal and interest payments for its onshore bank loans, trust loans and offshore bonds .RATINGS RATIONALEThe missed payments highlight the severe challenges facing CFLD given its weak liquidity. They will likely trigger cross defaults and accelerate the repayment of CFLD's onshore bonds and its other offshore bonds, and significantly disrupt CFLD's operations, jeopardizing its asset values. As a result, Moody's expects that the recovery value for CFLD's bondholders will be low.The Ca senior unsecured bond rating is one notch below the CFR due to the risk of structural subordination. This subordination risk reflects the fact that the majority of claims are at the operating subsidiaries and have priority over claims at the holding company in a bankruptcy scenario. In addition, the holding company lacks significant mitigating factors for structural subordination. As a result, the expected recovery rate for claims at the holding company will be lower.The negative outlook reflects CFLD's weak liquidity and the risks of high economic losses to CFLD's creditors.Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. Please refer to the Moody's Investors Service Policy for Withdrawal of Credit Ratings, available on its website, www.moodys.com.The principal methodology used in these ratings was Homebuilding And Property Development Industry published in January 2018 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1108031. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.China Fortune Land Development Co., Ltd. (CFLD) was founded in 1998 by Wen-Xue Wang in Hebei province and listed on the Shanghai Stock Exchange in 2011. The company engages in residential property development and the investment and operation of integrated industrial parks. The company's industrial park businesses include primary land development, infrastructure development and construction, industry development services, and property management and public services.As of September 2020, Wang held 37.20% of CFLD's shares and is thus the largest and controlling shareholder of the company. Ping An Life Insurance Company of China, Ltd. is the second-largest shareholder, with a 25.19% stake.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Moody's considers a rated entity or its agent(s) to be participating when it maintains an overall relationship with Moody's. Unless noted in the Regulatory Disclosures as a Non-Participating Entity, the rated entities are participating and the rated entities or their agent(s) generally provide Moody's with information for the purposes of its ratings process. Please refer to www.moodys.com for the Regulatory Disclosures for each credit rating action under the ratings tab on the issuer/entity page and for details of Moody's Policy for Designating Non-Participating Rated Entities.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.REFERENCES/CITATIONShttp://static.sse.com.cn/disclosure/listedinfo/announcement/c/2021-02-27/600340_20210227_2.pdf27-Feb-2021Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.The first name below is the lead rating analyst for this Credit Rating and the last name below is the person primarily responsible for approving this Credit Rating. Danny Chan Asst Vice President - Analyst Corporate Finance Group Moody's Investors Service Hong Kong Ltd. 24/F One Pacific Place 88 Queensway Hong Kong China (Hong Kong S.A.R.) 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