Fitch rates Yango notes B

Fitch Ratings said it assigned Yango Group Co., Ltd.’s proposed dollar-denominated senior notes a B rating and a recovery rating of RR5. The proposed notes will be issued by its wholly owned subsidiary, Yango Justice International Ltd. The notes are rated at the same level as Yango's senior unsecured rating as they will be guaranteed by the company.

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. Secured debt accounted for 68% of Yango’s total borrowings as of end-September and was equivalent to around 80% of Fitch-estimated liquidation value.

Yango successfully reduced its leverage in 2018 and the first half of 2019 from a peak in 2017, fulfilling management’s commitment. Its leverage, measured by net debt/adjusted inventory, including guarantees provided to and net assets of joint ventures and associates, improved to 67.8% in 2018 and dropped further to 63.8% in the first half of last year, after the company cut back on land acquisitions, the agency said.

Fitch said it believes the company can consistently deleverage towards 55% over the next three years based on its current controlled land-acquisition pace, and keep land acquisitions at 45%-50% of annual sales receipts – a level that would maintain a three-year land bank and support sustainable business development.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.