CHINA Vanke Co made a rare response to Moody’s downgrade last week, citing support from financial institutions and its biggest shareholder.

Vanke said that it “firmly opposes” the decision by Moody’s, arguing that shareholder Shenzhen SOE has made material support continually, while Vanke’s property sales remain among the highest in the industry.

“Moody’s rating move didn’t fully take Vanke’s efforts on operating, financing and liquidity into consideration,” Vanke said, adding that the downgrade might mislead the market and accelerate panic or volatility.

China Vanke’s long-term corporate family rating was downgraded by Moody’s to Ba3, from Ba1, on Friday (Apr 26). Moody’s cited the “expectation that China Vanke’s credit metrics and liquidity buffer will further decline over the next 6-12 months.” 

The developer held an meeting earlier this month, seeking to assuage market concern about its ability to stave off a default. Chairman Yu Liang and president Zhu Jiusheng told brokerages including Citigroup and UBS that the company will “make full use of all existing financing facilities”, and is receiving understanding and support from financial institutions.

Vanke is preparing an asset package totaling about 130 billion yuan (S$25 billion) to use as collateral as it seeks new bank loans, and some of Vanke’s regional units are setting up teams for potential asset sales, Bloomberg reported earlier. The company is also seeking to sell its entire stake in logistics firm GLP. BLOOMBERG

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