Fitch lowers Lai Fung to B+

Fitch Ratings said it downgraded Lai Fung Holdings Ltd.'s Long-Term Foreign- and Local-currency issuer default ratings to B+ from BB-. Fitch also downgraded the company's senior unsecured rating and the rating on its $350 million of senior notes due 2023 to B+ with a recovery rating of RR4 from BB-.

“The downgrade reflects Fitch's expectation that Lai Fung's non-development EBITDA interest cover will remain below 1x due to the bigger-than-expected operating cash outflows from its Hengqin Novotown commercial project. Fitch estimates Lai Fung's non-development EBITDA interest cover will rebound to about 1x in the financial year ending July 2021 (FY21), assuming an improvement in visitor numbers for the theme parks and higher occupancy rates for the hotel at Novotown when facilities reopen after their closure in late January due to the coronavirus,” said Fitch in a press release.

The outlook is stable.

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