S&P assigns B rating to DaFa Properties

S&P said it assigned a B long-term issuer credit rating to DaFa Properties Group Ltd.

The agency said it believes DaFa's high debt-funded expansion plan and accelerated construction compound its growing execution risks given the company's small scale and operations concentrated in the Yangtze River Delta region.

The company has narrow financing channels and higher funding costs compare with similar-sized peers due to its reliance on high-cost short-term non-bank borrowings, S&P said.

The company has an aggressive growth plan and its leverage will likely weaken to support replenishment of its small land bank, the agency said.

The stable outlook reflects our view that DaFa will continue to grow with good project execution, while reducing its overall funding cost.

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