Fitch: Golden Wheel notes B

Fitch Ratings said it assigned an expected B rating with recovery rating of RR4 to Golden Wheel Tiandi Holdings Co. Ltd.’s proposed dollar-denominated senior notes.

The notes are rated at the same level as the company’s senior unsecured rating because they constitute the company’s direct and senior unsecured obligations, Fitch said.

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

The company is focused on developing small commercial and residential projects linked to metro stations, Fitch explained.

Such projects usually fetch higher average selling prices because of their convenient location and better foot traffic for commercial-property components, the agency said.

But potential competition from large national developers for metro-linked projects may squeeze the company’s margin over the longer-term, Fitch added, although volume-driven developers are less likely to participate in small niche projects.

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