S&P put Wanda Commercial and its unit Wanda HK on negative watch on Friday for a possible downgrade, following similar action by Fitch on Thursday. Fitch said if the listing failed "the liquidity and credit profile of Wanda Commercial and DWG may deteriorate". S&P said it may lower the rating if it confirms the IPO is unlikely to happen, and if Wanda fails to implement practical alternatives to maintain its liquidity, such as successful negotiations with pre-IPO investors and talks with financial institutions to maintain solid relationships. Fitch said on Thursday it expected more clarity on the IPO in May, after the China Securities Regulatory Commission's recent update of Zhuhai Wanda's IPO filing status to "accepted" on April 20. Fitch cited Zhuhai Wanda as saying that if the regulator did not request additional material within five days of the status update, the company would receive a final filing notice shortly and may then proceed with the IPO in Hong Kong. Wanda Group declined to comment on the latest action by the agencies but when asked about progress on the IPO, it told Reuters it would resubmit its application as soon as possible. Wanda chairman Wang Jianlin, once China's richest man, told an internal meeting last week that the IPO was facing difficulties, and Wanda would stop acquiring land and halt new property management projects in order to cut debt in the next two years, sources told Reuters. Wanda Commercial's other unit, Wanda Properties Global Co Ltd, raised a total of $700 million in two dollar bond issues early this year, a rare bit of good news for the sector as it struggles to emerge from a bruising debt crisis.
The property sector, however, did not see any more issues after that, dashing hopes for a turnaround of China's high-yield bond market. Wanda's bonds issued this year were trading at about 60 cents on the dollar on Friday. ($1 = 6.9156 Chinese yuan renminbi) (Reporting by Clare Jim; Editing by Robert Birsel)
