Fitch downgrades Hopson

Fitch Ratings said it downgraded Hopson Development Holdings Ltd.'s long-term foreign-currency issuer default rating to B from B+. The agency also trimmed the senior unsecured rating and the ratings on Hopson's outstanding senior notes to B from B+ with an RR4 recovery rating.

“The downgrade reflects a poor company and industry sales performance in recent months, which has reduced Hopson's liquidity buffer. The company has limited land acquisitions this year to preserve cash for debt repayment, but a further weakening of sales would lower free cash flow, forcing Hopson to rely on cash on hand and other sources of liquidity to address upcoming debt maturities,” Fitch said in a statement.

The agency noted that “Around 80% of Hopson's debt is bank loans. We expect it to refinance most of these maturities, with support from its strong banking relationships and quality asset base.”

The outlook is stable.

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