More bad news for Dalian Wanda. S&P Global downgraded the Chinese development giant’s bonds to BB, or junk level, down from BBB-.
The downgrade comes a month after rumors began circulating on social media that the firm’s chair, Wang Jianlin, was no longer allowed to leave China. The company later published a photo of Wang in Hong Kong to dispel the rumors.
China’s Banking Regulatory Commission began investigating Dalian Wanda, along with four other companies, earlier this year for allegedly binging on debt.
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In July, the company announced the $9.4 billion sale of its hotel portfolio, cutting its debt load to $24.8 billion from $34.6 billion last year. But S&P argues that the sale would reduce cash flow and make it harder to service the remaining debt.