Moody’s gives B1 to Yuzhou bonds

Moody's Investors Service said it assigned a B1 rating to Yuzhou Properties Co. Ltd.’s (B1 stable) proposed senior unsecured bonds.

The outlook is stable.

Proceeds will be used to fund debt repayments and land acquisitions, and for general working capital purposes.

"The proposed bonds will further strengthen Yuzhou's liquidity position and improve its debt maturity profile," Moody's analyst Fiona Kwok said in a news release.

At end-June 2014, Yuzhou had a large cash balance of RMB 7.7 billion. This cash balance adequately covered its short-term maturing debt of RMB 2.2 billion and committed unpaid land premiums of RMB 900 million over the next 12 months. In addition, its cash to short-term debt ratio of 3.2 times was very strong when compared to its Ba and B-rated peers.

"Yuzhou's credit metrics are appropriately positioned at the B1 rating level, after considering the temporary debt increase to prefund its debt repayment needs in 1H 2015," Kwok, who is also the lead analyst for Yuzhou, added in the release.

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