On the downgrade, Fitch notes that:
"Aoyuan announced that it will not make payments on the remaining principal and the last instalment of interest of the January 2022 notes, and the latest instalment of interest under the 2023 notes and the 2024 notes upon expiry of the applicable 30-day grace period.
Failure to make the principal payment is consistent with Fitch's definition of an 'RD' rating, as the company has experienced an uncured payment default on a material financial obligation but has not yet entered into bankruptcy filing, administration, receivership, liquidation or other formal winding-up procedures, and has not otherwise ceased operating.
The non-payment of Aoyuan's January 2022 US dollar notes triggered default events on the company's other US dollar notes, which will become immediately due and payable if the bond trustee or holders of at least 25% in aggregate principal amount of the offshore notes declare so."
Some background to this from last year: