Moody's rates Sunac China notes B2

Moody's Investors Service said it assigned a B2 senior unsecured rating to Sunac China Holdings Ltd.'s proposed dollar-denominated notes.

The proceeds will be used from the issuance mainly to refinance existing debt.

The proposed notes will support Sunac's liquidity profile and will not materially affect its credit metrics because the company will use the proceeds mainly to refinance existing debt, Moody's said.

Supported by an expected increase in revenue recognition from strong contracted sales and controlled spending for land purchases over the next 12- to 18-months, the agency said it expects that Sunac's debt leverage will trend toward 60% to 70%, from about 50% for the 12 months that ended in June 2018.

Sunac's B1 corporate family rating reflects the company's large scale, strong sales execution and well located land bank, along with its likely improvement in land spending, debt management and revenue recognition, Moody's said.

The ratings are constrained by the company's investments in non-core businesses and the increase in investments in joint ventures, the agency added.

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