Moody's rates Fantasia notes B3

Moody's Investors Service said it assigned a B3 rating to Fantasia Holdings Group Co., Ltd.'s proposed senior unsecured dollar-denominated notes.

The proceeds will be used to refinance certain of its existing indebtedness and for general corporate purposes, Moody's said.

The proposed bond issuance will not materially change Fantasia's credit metrics in the next 12- to 18-months, but will slightly improve its maturity profile, the agency said.

Moody's said it expects Fantasia's leverage will trend toward 40% in the next 12- to 18-months, from 32% in 2018, largely driven by an increase in revenue on the back of strong contracted sales growth.

Fantasia's B2 corporate family rating reflects the company's established track record in property development in the Chengdu-Chongqing Economic Zone and the Pearl River Delta, along with the diversified income streams from its property management and rental and hotel management businesses, the agency said.

The ratings are constrained by the company's high leverage and weak interest coverage, which is in turn caused by its high cost financing, Moody's said.

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