Moody's rates Fantasia notes B2

Moody's Investors Service said it assigned a B2 rating to the senior notes proposed by Fantasia Holdings Group Co. Ltd.

Moody's affirmed Fantasia's B1 corporate family rating and B2 senior unsecured debt rating.

The outlook is stable.

Proceeds will be used to refinance some of the company's debt, to fund property development and for general corporate purposes.

"The issuance of the RMB notes will strengthen Fantasia's liquidity position and extend its debt maturity profile," Jiming Zou, a Moody's analyst, said in a statement.

"Given the current competitive pricing environment for RMB notes, Fantasia is also expected to improve its overall borrowing costs as the outstanding US dollar bonds were borrowed at higher costs some 2 years ago," Zou noted.

Fantasia's B1 corporate family rating reflects the company's established niche business model, which balances the development of commercial and residential properties, the agency said.

This strategy partly mitigates the short-term impact on its performance of regulatory measures for the residential sector in China, the agency noted.

The rating also factors in its stable operating and financial profile and disciplined approach to financial management, Moody's said.

The rating is constrained by geographic concentration risk and the execution risk associated with the company's expansion into new locations, the agency said.

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