Fitch rates China Vanke notes BBB+

Fitch Ratings said it assigned an expected BBB+ rating to China Vanke Co., Ltd.'s proposed senior unsecured dollar-denominated notes.

The proposed notes are to be issued under the $7 billion medium-term note program by Vanke's subsidiary, Vanke Real Estate (Hong Kong) Co. Ltd.

The proceeds will be mainly used to refinance the offshore indebtedness of the issuer and the group, the agency said.

The rating is driven by the company's strong financial profile, even as it is increasing its investments in non-homebuilding businesses and expanding homebuilding sales, Fitch said.

China Vanke's low leverage is expected to be maintained at less than 20%, which gives it strong financial flexibility to counter industry headwinds that are driven by regulatory constraints, the agency said.

Fitch said it believes the company had sufficiently built up its land bank to capitalize on the increase in housing prices between 2016 and 2018.

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