Fitch lowers Oceanwide, notes to B-

Fitch Ratings said it downgraded Oceanwide Holdings Co. Ltd.'s long-term foreign-currency issuer default rating, senior unsecured rating and the rating on its outstanding dollar-denominated senior notes to B- from B.

The recovery rating on the senior unsecured rating is RR4.

The outlook is stable.

Fitch said the downgrade reflects the rise of Oceanwide's net debt by RMB 28 billion in 2017 following a similar increase in 2016.

The rate of increase in debt is much faster than the agency’s expectations and means that Oceanwide's leverage, as measured by net debt/adjusted inventory including available for sale financial assets (AFS) and financial institution (FI) investments, of 78.6% at end-2017 will take longer to reduce below 70%, a level that is commensurate with a B rating level for large Chinese homebuilders, Fitch explained.

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