Fitch rates Yango Group notes B-

Fitch Ratings said it assigned an expected rating of B- with recovery rating of RR5 to Yango Group Co., Ltd.'s proposed dollar-denominated senior notes.

The proposed notes are rated at the same level as Yango's senior unsecured rating because they constitute its direct and senior unsecured obligations, Fitch said.

The proceeds will be used to refinance its existing debt, the agency said.

The one-notch difference between Yango's senior unsecured rating and long-term issuer default rating reflects the subordination of its unsecured debt to secured debt, Fitch said.

Secured debt accounted for about 70% of Yango's total borrowings as of the end-September 2017, the agency said, and made up more than 80% of estimated liquidation value.

Fitch also said it believes Yango's land bank, which was acquired at low cost and partly located in tier 1 cities, will support its business scale growth and healthy profit margin.

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