Moody's rates Yango Justice notes B3

Moody's Investors Service said it assigned a B3 senior unsecured rating to the proposed dollar-denominated notes to be issued by Yango Justice International Ltd. and guaranteed by Yango Group Co., Ltd.

The outlook is positive.

The proceeds will be used to refinance existing indebtedness.

The proposed bond issuance will lengthen Yango's debt maturity profile and will not have a material impact on its credit metrics because the proceeds will mainly be used to repay existing debt, Moody's said.

The agency said it expects that the company's debt leverage to trend toward 60% to 65% over the next 18 months, from 44% in 2018.

Revenue growth and stable profit margins also will improve interest coverage to about 2.3x to 2.5x, from 2.2x over the same period, Moody's added.

The ratings reflect Yango's quality and geographically diversified land bank, large scale and strong sales execution, the agency said.

The ratings are constrained by its high debt leverage, sizable land acquisitions and expansion into new regions in China, Moody's said.

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