Fitch rates Oceanwide notes B

Fitch Ratings said it assigned an expected B rating with recovery rating of RR4 to the proposed dollar-denominated senior notes of Oceanwide Holdings Co. Ltd.

The notes will be issued by Oceanwide Holdings International 2015 Co., Ltd., a wholly owned subsidiary of Oceanwide.

The notes, guaranteed by Oceanwide, are rated at the same level as Oceanwide’s senior unsecured rating because they represent direct and senior unsecured obligations of the company, Fitch said.

The proceeds will be used for general corporate purposes, including the development of the First & Mission Project located in San Francisco, the agency said.

The ratings are supported by the company’s sales performance, which is on track to meet its ¥12 billion contracted sales target in 2015, Fitch said, and an expectation that it will generate positive cash flow from operations from 2016.

The ratings are constrained by the company’s rapid increase in net debt to ¥35 billion in 2014 from ¥22 billion in 2013, which is likely to continue in 2015 as the company ramps up development expenditure to support sales growth, the agency said.

© 2015 Prospect News.
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