Moody's rates Yanlord bond Ba2

Moody's Investors Service said it assigned a Ba2 rating to Yanlord Land Group Ltd.'s proposed bond issue and affirmed its Ba2 corporate family rating.

The outlook is stable.

The proceeds will be used to pay down the company's existing debt and to fund general corporate purpose, Moody's said.

The affirmation reflects an expectation that Yanlord's management will prudently conduct its land acquisitions and debt management such that adjusted debt/capitalization remains at less than 45%, the agency said.

The proceeds of the bonds will provide Yanlord with additional liquidity and financial flexibility to implement its business plan even in the tight bank credit conditions likely to be prevalent in China in 2011, Moody's added.

Yanlord's small scale, revenue concentration in Shanghai and deluxe products will continue to expose it to high business volatility, given that housing demand in 2011 is likely to be suppressed as a result of the government's stringent enforcement of control measures, the agency said.

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