Ratings agency Fitch said on Wednesday it has downgraded Chinese property developer China Evergrande Group and two of its subsidiaries, a day after a similar step by Moody’s Investors Service.

“The downgrade reflects our view that a default of some kind appears probable. We believe credit risk is high given tight liquidity, declining contracted sales, pressure to address delayed payments to suppliers and contractors, and limited progress on asset disposals,” Fitch said in a statement.

Evergrande’s shares are down 2.4 per cent today to $3.48 on Hong Kong’s exchange. The stock has plummeted 76 per cent this year, while many of its dollar bonds are hovering below 30 cents.

Meanwhile, Bloomberg reports Moody’s Investors Service downgraded Evergrande’s credit rating by three notches to Ca, which implies it is “likely in or very near default.”

And Goldman Sachs cut the stock to sell from neutral, slashing its target price to HK$3 from HK$15.6.

Evergrande has been repeatedly downgraded in recent months, reflecting the deepening crisis at the world’s most indebted developer as it scrambles to raise cash and keep creditors at bay. Two trust companies have demanded immediate repayment of some loans, people familiar with the matter said last week.

“Evergrande will have to rely on asset sales or investments from potential investors to generate funds for debt servicing,” Cedric Lai, a senior analyst at Moody’s, said in a statement. “But these fundraising activities entail high uncertainties.”

With more than $300 billion of liabilities, Evergrande may roil lenders, suppliers, small businesses and millions of homebuyers should it collapse. Chinese authorities have kept quiet about their plans for the company so far, aside from urging it to resolve its debt risks.

Evergrande’s liquidity and default risk is “heightened,” Moody’s said in its third downgrade of the developer since June.

The real estate firm has insufficient cash on hand to cover short-term debt and borrowings maturing in the next 12 months, Moody’s said, adding that it’s unlikely to be able to raise enough new funds for refinancing given its deteriorated funding access.

Evergrande itself last week warned of default risks if its efforts to raise cash fall short. Its cash coverage to short-term borrowings worsened in the first half to 36 per cent from 47 per cent from six months earlier, according to Bloomberg calculations based on an earnings statement. The company hasn’t sold a dollar bond since January last year.

While Evergrande’s bonds won’t face maturity or potential investor demand for early repayment this year, its liquidity pressure is likely to intensify starting next year, Goldman Sachs analysts led by Wang Yi wrote in their report.

Reuters and Bloomberg