Fitch places Chindata on watch

Fitch Ratings said it placed its BBB- ratings on Chindata Group Holdings Ltd. and its $300 million bond on rating watch negative.

The RWN follows an announcement that the company's controlling shareholder, Bain Capital Entities, has proposed privatizing Chindata, valuing the company at $2.9 billion. The proposal is preliminary and non-binding, with an undisclosed funding structure. A special committee at Chindata is evaluating the proposal.

“The RWN reflects the risk that the transaction will raise Chindata's EBITDA net leverage to above 5x or reduce EBITDA interest coverage to below 2.5x in the medium term,” Fitch said in a statement.

The agency said it will resolve the RWN after the funding structure and terms are determined and the transaction becomes practically unconditional, or if it fails to complete, which may take more than six months.

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