Moody's: Sunac unaffected by tap offering

Moody's Investors Service said that Sunac China Holdings Ltd.'s B1 corporate family rating is unaffected by news that the company of a tap bond offering on its senior unsecured dollar-denominated notes due 2020.

The outlook is positive.

The proceeds from the proposed issuance will be used to refinance existing debt, the agency said.

Given that the proposed bonds will be used for debt refinancing, Moody's said it expects Sunac's debt leverage to trend toward 60% to 70% over the next 12- to 18-months from about 50% for the 12 months that ended June 30.

These projected credit metrics support the ratings and positive outlook, the agency said.

The ratings also consider the company's large scale, strong sales execution and well-located land bank, likely improvement in land spending, debt management, revenue recognition and gross profit margins, which will in turn improve its credit metrics, Moody's said.

The ratings are constrained by the company's investments in non-core businesses and the increase in investments in joint ventures, the agency said.

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