Fitch lowers Sunac China

Fitch Ratings said it affirmed Sunac China Holdings Ltd.'s long-term foreign-currency issuer default rating at BB- with a negative outlook.

The agency also said it downgraded Sunac's senior unsecured rating and the ratings of its outstanding dollar-denominated notes to B+ from BB-.

The negative watch, which has been in place since July, is now resolved, Fitch said.

The ratings actions follow the confirmation of the final payment of ¥14.2 billion for the company's 91% stake in 13 Wanda City projects, the agency said.

Fitch said it expects the title transfer for the remaining five Wanda City projects to Sunac to be completed soon.

The ratings reflect an expectation that the company's leverage will stay higher than 50% in 2017, but possibly fall to less than this level in 2018, the agency said.

Sunac's management has publicly committed to de-leveraging and there is no pressure for Sunac to continue aggressive land banking, Fitch said.

Sunac's geographical diversification has improved with concentration in the Pan Bohai Rim, Yangtze River Delta and Chengdu/Chongqing regions dropping to 66% in the first half of 2017, from 95% in 2015, the agency said.

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