Moody's affirms Zendai

Moody's Investors Service said it affirmed the B2 corporate family and senior unsecured ratings of Shanghai Zendai Property Ltd.

The outlook remains stable.

The affirmation follows Zendai's announcement that it will purchase the entire interest in Giant Hope Investment Ltd. for up to HK$1 billion from the vendor, which is 85%-owned by Zendai's major shareholder.

"Zendai's leverage and liquidity position will remain largely unaffected as the transaction is to be fully equity funded," Kaven Tsang, Moody's analyst, said in a written statement. "The impact of the assumption of debts at the acquired group will also be largely covered by the increased cash flow and enlarged equity base."

"While these new development projects will increase Zendai's construction expenditure in the near-to-medium term, the investment projects are well located and cash generative, and hence would support the company's recurring cash flow," Tsang said.

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