Moody's rates Yuzhou Properties, notes B2

Moody's Investors Service said it assigned a first-time B1 corporate family rating to Yuzhou Properties Co. Ltd., along with a provisional B2 rating to its proposed dollar-denominated senior unsecured bond issues.

The outlook is stable.

The proceeds will be used to fund Yuzhou's land acquisitions and working capital requirements and to repay some loans, Moody's said.

The ratings reflect the high execution and financial risk arising from its rapid growth plan, as well as the company's short operating history in a highly volatile Chinese property market, Moody's said.

The ratings also take into account Yuzhou's small operating scale, which translates into high geographic and cash flow concentration in a few projects, mainly in Xiamen, the agency said.

Partly mitigating these challenges is Yuzhou's leading market position and quality land bank in Xiamen, which supports sales stability to some extent, Moody's added.

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