Moody's rates KWG Property notes B1

Moody's Investors Service said it assigned a definitive B1 senior unsecured bond rating on the $250 million 12½% notes due 2017 issued by KWG Property Holding Ltd.

Moody's affirmed the company's Ba3 corporate family rating.

The outlook is stable.

"KWG's Ba3 corporate family rating reflects its strong brand name, in turn supported by its quality products and its diversified product range," Peter Choy, a Moody's vice president and senior credit officer, said in a statement.

"The ratings also recognize KWG's good operating track record for property development in the Mainland cities of Guangzhou, Chengdu and Suzhou," Choy said.

"However, the ratings are constrained by the low geographic diversity apparent in its portfolio, with half of its land bank located in Guangzhou," Choy noted.

"The ratings also factor in the execution risk associated with the company's entry into new cities and the developing status of its offshore banking relationship."

The bond rating has been notched down to B1 from Ba3, reflecting the risk of structural and legal subordination, Moody's said.

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