Moody’s lowers Sino-Ocean view to negative

Moody’s Investors Service said it changed the outlook on Sino-Ocean Land Holdings Ltd. and its subsidiaries to negative from stable.

Moody’s also said it affirmed Sino Ocean’s Baa3 issuer rating and Baa3 senior unsecured ratings on the bonds issued by Sino-Ocean Land Treasure Finance I Ltd. and Sino-Ocean Land Treasure Finance II Ltd.

The negative outlook reflects a concern about the company’s weakening credit metrics, Moody’s said.

The company’s financial risk has increased as the company’s adjusted debt level increased, the agency said.

Moody’s also said it expects Sino Ocean’s profitability to remain low with a gross profit margin of between 20% and 22% in 2015 and 2016, compared with about 21% in 2014 and 24.3% in 2013.

The ratings on Sino Ocean reflect its standalone credit strength and a two-notch ratings uplift based on expected strong support from China Life as its largest shareholder, the agency said.

The ratings also consider its long operating history in the property sector since 1993 with leading market positions in Beijing and Dalian, Moody’s said.

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