Moody's rates DaFa notes B3

Moody's Investors Service said it assigned a B3 senior unsecured rating to DaFa Properties Group Ltd.'s proposed dollar-denominated notes.

The proceeds from the bonds will primarily be used by DaFa for refinancing certain of its existing indebtedness, Moody's said.

The proposed bond issuance will support DaFa's liquidity and growth aspiration, the agency said.

Moody's said it expects that DaFa's debt leverage will weaken to about 70% over the next 12- to 18-months from about 105% in 2018, as it replenishes its land bank.

But this level of debt leverage remains appropriate for its B2 corporate family rating, the agency explained.

DaFa's B2 corporate family rating reflects the company's track record of developing properties in the Yangtze River Delta and its demonstrated ability to maintain debt leverage at appropriate levels, Moody's said.

The rating also considers the company's small scale, high geographic concentration in low tier cities, the agency said, and the high proportion of trust loans in its funding mix.

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