Moody's assigns Modern Land notes B3

Moody's Investors Service said it assigned a B3 senior unsecured debt rating to Modern Land (China) Co., Ltd.'s proposed dollar-denominated notes. The company plans to use the proceeds to refinance debt.

“The proposed bond issuance, if completed, will have limited impact on Modern Land's credit profile, given that the proceeds will mainly be used to refinance the company's existing debt,” said Celine Yang, a Moody's assistant vice president and analyst, in a press release.

Moody's said it expects Modern Land's debt leverage, as measured by revenue/adjusted debt, to weaken to around 55% over the next 12-18 months from 69% for the 12 months ended June 2019, because its debt growth will likely outpace revenue growth to fund land acquisitions. Meanwhile, the company's EBIT/interest will likely weaken slightly to around 2x over the next 12-18 months from 2.2x for the 12 months ended June 2019.

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