Fitch: Future Land unchanged

Fitch Ratings said the B+ ratings on Future Land Development Holdings Ltd. and its dollar- and offshore yuan-denominated bonds due 2018 and 2016 will not be impacted even if the proposed amendments in a consent solicitation announced Aug. 20 are adopted.

The purpose of the consent solicitation is to make the indenture of the 2018 dollar bonds and 2016 offshore yuan bonds conform to the terms of the dollar bonds due 2019, Fitch said.

The major proposed amendments of the indenture include lowering the minimum fixed-charge coverage ratio that the company must maintain to 2.75x from 3.0x, along with additional exceptions, known as carve-outs, to payment restrictions, the agency said. Those include allowing the company to invest in shares of a restricted subsidiary held by a minority shareholder and raising the caps on permitted indebtedness to 30% of total assets for the purchase price of assets, trust financings, investment properties, secured bank deposits, and guarantees on third parties, Fitch said.

The proposed amendments will loosen the existing indentures on the bonds due 2016 and 2018, but the changes facilitate Future Land's business operation and are not material, especially since the bonds due 2019 already feature the looser indentures, the agency added.

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