S&P assigns Fantasia notes B

S&P said it gave a B long-term issue rating to an issue of dollar-denominated senior unsecured notes by Fantasia Holdings Group Co. Ltd.

“We equalize the issue rating with the issuer credit rating on Fantasia, due to the absence of significant priority debt to cause material subordination risk. As of Dec. 31, 2020, Fantasia's capital structure consisted of Chinese renminbi (RMB) 10.7 billion in secured debt and RMB 7.2 billion in unsecured debt issued by the company's subsidiaries, which we consider as priority debt. Fantasia also had RMB 29 billion of unsecured debt at the parent level that is mainly offshore senior notes. Its priority debt ratio was 37%, below 50%, which is our threshold for notching down an issue rating,” S&P said in a press release.

Fantasia intends to use the proceeds to refinance debt. It also offered to repurchase its offshore senior notes due in October 2021 today.

“Fantasia's extensive use of offshore financing subjects it to market volatilities, in our view,” the agency said.

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