Fitch: Oceanwide view negative

Fitch Ratings said it revised Oceanwide Holdings Co. Ltd.'s outlook to negative from stable and affirmed its long-term issuer default rating at B and its senior bonds at B/RR4.

The negative outlook reflects Fitch’s belief that Oceanwide's contracted sales to net debt, a measure of its sales efficiency, will remain below 0.25x due to contracted sales growing at a slower pace than the agency had expected, which would push its net debt higher.

Oceanwide's ratings are constrained by its persistently high leverage, which has been increasing and will continue to do so for the next 18 to 24 months as the company ramps up development expenditure to support sales growth and continues to invest in its finance business, Fitch said.

The agency said the affirmation reflects Oceanwide's sufficient liquidity and good-quality land bank.

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