Fitch applies B to Golden Wheel notes

Fitch Ratings said it assigned Golden Wheel Tiandi Holdings Co. Ltd.’s (B/stable) proposed dollar-denominated senior notes a B(EXP) expected rating and a recovery rating of RR4.

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

Golden Wheel intends to use the net proceeds to refinance its existing debt, fund new property projects and for general corporate purposes.

Fitch said Golden Wheel is focused on developing small commercial and residential projects linked to metro stations. The company had seven projects under development at the end of March, and the agency said the projects usually fetch higher average selling prices because of their convenient location and better foot traffic for commercial property components.

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

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