Moody's rates Yuzhou notes B2

Moody's Investors Service said it assigned a definitive B2 senior bond rating to the $200 million 13.5% five-year notes issued by Yuzhou Properties Co. Ltd. The company has a B1 corporate family rating.

The outlook is stable.

The agency said Yuzhou is exposed to a high level of execution and financial risk, which arises from its rapid growth plan and short operating history in China's highly volatile property market, and a high level of geographic and cash-flow concentration risk given its small operating scale.

Yuzhou's leading market position and quality land bank in Xiamen may partly mitigate these challenges, Moody's said, adding that the company's low-cost land bank and decent profit margin will give it more flexibility in the event of a market slowdown.

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