Fitch rates Zhenro notes B+

Fitch Ratings said it assigned Zhenro Properties Group Ltd.’s proposed dollar-denominated senior notes a B+ rating, with a recovery rating of RR4. The notes are rated at the same level as Zhenro’s senior unsecured rating because they constitute direct and senior unsecured obligations. Zhenro intends to use the proceeds primarily refinance debt.

“Zhenro’s ratings are supported by the company repaying its debt through equity issuance and internally generated cash flow, which Fitch believes has reduced its leverage – defined by net debt/adjusted inventory, including proportional consolidation of joint ventures and associates – to around 51% by end-2019, from 55% in 1H19. Fitch believes Zhenro can sustain leverage at around 50% as it pursues a less aggressive growth strategy than in the past two years,” the agency said in a press release.

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