Bonds issued by a unit of a Chinese textile conglomerate that has sought to challenge global luxury behemoth LMVH have slumped after ratings downgrades, drawing fresh attention to credit risks associated with Chinese issuers.

A $300 million 2022 bond with a coupon of 6.95% issued by Prime Bloom Holdings, a unit of Shandong Ruyi Technology Group, was quoted near 40 cents on the dollar on Friday, according to Refinitiv data, compared with 48 cents last week.

A second, $345 million 7.5% Prime Bloom bond was trading at 48 cents on the dollar on Friday compared with 70 cents a week earlier, according to Refinitiv. The company is due to repay the bond on Dec. 19.

Credit-rating firm Moody’s flagged the Dec. 19 deadline on Thursday when it pushed Shandong Ruyi deeper into speculative grade territory, downgrading its corporate family rating to Caa1 from B3.

It also downgraded the rating on the two Prime Bloom bonds, which are guaranteed by Shandong Ruyi, to Caa2 from Caa1.

“The downgrade reflects our increased concerns over Shandong Ruyi’s heightened refinancing risk, given its large upcoming debt maturities, continued weak liquidity, and limited progress on its refinancing plans,” Chenyi Lu, a Moody’s vice president and senior credit officer, said in a statement on Thursday.

In addition to the $345 million due next week, Shandong Ruyi faces as much as 4.4 billion yuan ($625.10 million) in repayments on bonds that mature or that have put options, allowing investors to sell them back to the company, in 2020, Moody’s said.

Shandong Ruyi did not immediately respond to Reuters’ requests for comment on Friday.
The concerns over Shandong Ruyi follow missed payments by two state-owned firms, Peking Founder and Tianjin’s Tewoo Group, which have raised new worries over the financial health of Chinese issuers.

Shandong Ruyi’s brands include classic British menswear makers Kent & Curwen and Gieves & Hawkes, and Cerruti 1881, a Paris-based fashion house which also makes fragrances and watches. It also has the rights to Playboy-branded underwear, according to its website.

The company, formerly a state-owned textiles firm, also bought a controlling stake in Swiss luxury shoe and accessories firm Bally last year, part of its mission to establish a Chinese fashion empire to challenge LVMH.

Shares of Shandong Ruyi Woolen Garment Group Co, a listed subsidiary, were 0.93% higher in Shenzhen on Friday. They have fallen 13.2% this year.