Fitch rates Yango notes B-

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

The proposed notes will be issued by its subsidiary Yango Justice International Ltd., Fitch said, and guaranteed by Yango.

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

The proceeds will be used to refinance its existing debt.

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

Yango has built up a diversified land bank in its home markets in Fujian province and major tier 1 and tier 2 cities in China, the agency said.

The rapid sales growth and steady cash collection also have been aided by the company's fast-churn business model and enhancements to its projects with education resources operated by its parent, Fujian Yango Group Co., Ltd., Fitch said.

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