Fitch rates Oceanwide notes B

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

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

The notes, which will be guaranteed by Oceanwide, are rated at the same level as Oceanwide’s senior unsecured rating because they represent direct and senior unsecured obligations, the agency said.

The proceeds will be used for general corporate purposes, Fitch said.

The ratings are supported by the company’s strong sales momentum and solid asset value, the agency said.

The company remains on track to generate cash from the sale of development properties to fund its expansion into the financial sector, Fitch added.

The ratings are constrained by the rapid increase in net debt to ¥68 billion in the first quarter of 2016 from ¥35 billion in 2014, the agency said.

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