Moody's rates Shanghai Real Estate notes Ba3

Moody's Investors Service said it assigned a provisional Ba3 foreign-currency senior unsecured debt rating to Shanghai Real Estate Ltd.'s proposed $150 million bond issuance and a provisional Ba3 local-currency corporate family rating to the company. The outlook is stable.

Moody's said the ratings reflect the key challenges faced by Shanghai Real Estate, including its lumpy operating cash flow, resulting from a single business focus on property development; significant geographic concentration in a market subject to an evolving policy and regulatory environment; and rising leverage as a result of aggressive spending on property development and land acquisitions.

The ratings also recognize the company's established operating track record, its strong domestic franchise under the Oasis Garden brand in Shanghai that commands premium pricing and its ample cash balance, which provides some support to financial flexibility and liquidity, the agency said.

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