Fitch rates Oceanwide notes B-

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

The proposed notes will be issued by the company's wholly owned subsidiary, Oceanwide Holdings International Development III Co., Ltd.

The notes will be guaranteed by the parent company and are rated at the same level as Oceanwide's senior unsecured rating because they constitute its direct and senior unsecured obligations, Fitch said.

Part of the proposed notes is being offered in exchange for its $400 million notes due May 28, the agency noted.

The proceeds will be used for refinancing existing debt, Fitch said.

The ratings are constrained by the company's high leverage, but it is expected to improve by year-end 2019 after it sells assets to Sunac China Holdings Ltd., the agency said.

But the company's total debt will stay high, Fitch said, and its leverage will remain under pressure due to weaker sales without contribution from the disposed projects, as well as high interest and tax burden.

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