S&P changes Sunac China view

S&P said it revised its outlook on Sunac China Holdings Ltd. to stable from negative and affirmed the B+ long-term issuer credit rating and the B long-term issue rating on the company's outstanding senior unsecured notes.

The agency said it revised the outlook because it expects Sunac's leverage to improve in 2018 on the back of strong contracted sales, stable margins and a reduced appetite for debt-funded acquisitions.

S&P said it estimates that Sunac's see-through debt-to-EBITDA ratio, including the attributable non-consolidated financials of joint ventures and associates, improved to 15 times in 2017, from about 19 times in 2016.

“We anticipate that the ratio will improve further to about 10x in 2018 based on our expectation of strong earnings growth and more controlled expansion,” the agency said in a news release.

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