Fitch rates Yuzhou Properties notes BB-

Fitch Ratings said it assigned an expected BB- rating to Yuzhou Properties Co. Ltd.'s proposed dollar-denominated senior unsecured notes.

The notes are rated at the same level as Yuzhou's senior unsecured rating because they constitute direct and senior unsecured obligations of the company, Fitch said.

The proceeds will be used to refinance its existing indebtedness, the agency said.

The ratings are supported by the company's strong contracted sales growth and regional diversification, Fitch said.

The company has a good quality low cost land bank, which upholds its favorable margin compared with peers, the agency said.

Yuzhou's active land acquisition will increase its contracted sales in the medium term, although that may drive leverage, Fitch said.

The agency said it believes Yuzhou's acquisition of seven projects in 2018 will enhance its geographical diversification, as they include properties in three cities where it does not yet operate.

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