Fitch gives Fantasia notes B+

Fitch Ratings said it assigned Fantasia Holdings Group Co., Ltd.’s proposed dollar-denominated senior unsecured notes a B+ rating, with a recovery rating of RR4.

The proposed notes are rated at the same level as Fantasia’s senior unsecured rating because they will constitute its direct and senior unsecured obligations. The company plans to use the proceeds to refinance debt, including the concurrent offer to repurchase its 8 3/8% senior notes due 2021 and for general corporate purposes.

Fantasia’s rating is supported by land reserves that are adequate to sustain its current business scale, a healthy EBITDA margin and moderate leverage. The company’s land bank has some concentration in Chengdu and Guilin, but it has more than 30 urban redevelopment projects in the Greater Bay Area that provide geographical diversification. The company’s land reserves are adequate for property development over the next three to four years, the agency said.

“We expect Fantasia to maintain its 2019-2020 EBITDA margin, excluding capitalized interest, at similar levels to the 25.8% in 2018. We also forecast Fantasia’s leverage, measured by net debt/adjusted inventory, will remain around 45%, in line with B+ rated peers,” Fitch said in a press release.

© 2015 Prospect News.
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