Moody's: Greentown China view negative

Moody's Investors Service said it changed to negative from stable its outlook for Greentown China Holdings Ltd.'s Ba2 corporate family rating and senior unsecured bond rating.

The outlook change has been prompted by Greentown's acquisition of a parcel of land in Hangzhou for 3.5 billion in Chinese renminbi, a major transaction. Moody's said this follows closely after another large land purchase in Wenzhou. Moody's said it expects the new acquisition could increase adjusted leverage to about 65% in the near term, and hence delay its original plan for de-leveraging.

For the outlook to revert to stable, Moody's said it would need to see Greentown successfully achieve its expected sales figures and arrange the equity financing or third-party investment required to develop the new acquisitions, such that its de-leveraging plan stays on track.

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