Fitch revises China Aoyuan view to negative

Fitch Ratings said it revised the outlook on China Aoyuan Group Ltd. to negative from stable and affirmed the foreign-currency issuer rating at BB. Fitch also affirmed the senior unsecured rating and the rating on its outstanding dollar-denominated senior notes at BB.

“The negative outlook reflects Fitch's view that Aoyuan's proportional consolidated leverage may stay at above 40%, our negative rating trigger, in forecast period to 2024 after it edged up to 41.8% by end-2020 from 37.9% at end-June 2020. Fitch is uncertain if the drop in implied cash collected can be reversed by end-2021 and whether Aoyuan can reduce guarantees to joint ventures and associates in 2021,” the agency said in a press release.

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