Fitch gives Yuexiu Property notes BBB-

Fitch Ratings said it assigned Yuexiu Property Co. Ltd.’s (BBB-/stable) $3 billion guaranteed medium-term note program a BBB- rating and an expected rating of BBB-(EXP) to the proposed offshore senior unsecured notes to be issued under the program by subsidiary Westwood Group Holdings Ltd.

The proposed notes will be unconditionally and irrevocably guaranteed by Yuexiu Property and are rated in line with its senior unsecured rating, as they will constitute its unconditional, unsecured and unsubordinated obligations.

Proceeds will be used to refinance existing debt and for general corporate purposes.

Fitch said it assesses Yuexiu Property’s standalone rating at BB to reflect moderate leverage, strong market position in China's Guangzhou municipality, geographic diversification and improved operating cost controls, which should see the company's profitability – measured by its EBITDA margin – stabilize over the next two to three years.

The rating incorporates a two-notch uplift due to moderate linkage with Yuexiu Property’s parent, Guangzhou Yuexiu Group Ltd., in line with Fitch's Parent and Subsidiary Rating Linkage criteria.

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