HONG KONG (BLOOMBERG) – China Evergrande Group shares fell below their 2009 initial public offering price after a second credit-rating downgrade in as many days boosted concern the developer will default on its debt.

The stock dropped 2.8 per cent to HK$3.47 in Hong Kong trading on Wednesday morning (Sept 8), breaching the HK$3.5 apiece offered on debut. Shares of the troubled developer have tumbled about 77 per cent this year, while many of its dollar bonds are hovering below 30 cents.

Fitch Ratings cut Evergrande to CC, saying a default seems probable as the company struggles to address its worsening liquidity issues. 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.

“The downgrade reflects our view that a default of some kind appears probable,” Fitch said in a statement. “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.”

The move by Fitch came a day after Moody’s Investors Service cut Evergrande’s credit rating by three notches to Ca, which implies it is “likely in or very near default.” The conglomerate’s liquidity and default risk is “heightened,” Moody’s said in its third downgrade of the real estate giant since June.

With more than US$300 billion (S$403.8 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 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 US dollar bond since January last year.