Moody’s Ratings has downgraded Yanlord Land Group Limited’s corporate family rating to B2 from B1 and its senior unsecured rating to B3 from B2. The downgrade, announced on 16 May 2025, is attributed to Yanlord’s declining operating scale and ongoing contracted sales declines, which are expected to weaken its performance and credit metrics over the next 12 to 18 months.
Yanlord, a real estate developer in China and Singapore, has seen its gross contracted sales fall to RMB22.2 billion in 2024, continuing a downward trend from 2023. This decline is driven by sector challenges and a slowdown in land replenishment. Moody’s Assistant Vice President and Analyst, Daniel Zhou, noted, “The stable outlook reflects our expectation that Yanlord will maintain adequate liquidity to meet all funding needs over the next 12 to 18 months.”
Despite the downgrade, Yanlord’s B2 rating considers its established brand, high-quality products, and adequate liquidity. The company benefits from solid recurring rental income from its investment properties in China and Singapore. However, its ratings are constrained by reduced operating scale, declining sales, and significant exposure to joint ventures.
Moody’s projects Yanlord’s debt leverage to increase to around 7.0x over the next 12 to 18 months, with adjusted EBIT/interest coverage declining to approximately 2.0x. The company’s liquidity remains adequate, supported by a cash balance of RMB10.2 billion and operating cash flow sufficient to cover debt maturities, including a $500m bond due in May 2026.
Yanlord’s ability to raise secured loans by pledging its investment properties can support liquidity, though increased reliance on secured borrowings may reduce financial flexibility. The B3 senior unsecured debt rating reflects structural subordination risk, with most claims at operating subsidiaries having priority over senior unsecured claims in a bankruptcy scenario.
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