Fitch rates Guorui notes B

Fitch Ratings said it published a long-term issuer default rating of B on Guorui Properties Ltd.

The outlook is stable.

The agency also said it assigned an expected senior unsecured rating of B on its proposed dollar-denominated senior unsecured notes with a recovery rating of RR4.

The ratings are supported by a healthy EBITDA margin, stable investment-property rental income and a quality land bank that is large enough to support sustained improvement in its contracted sales, Fitch said.

The ratings are constrained by high leverage that the agency will hover about 60% in the next 18 months, the agency said.

The proposed notes are rated at the same level as Guorui's senior unsecured rating because they will constitute direct and senior unsecured obligations of the company, Fitch said.

The ratings also are constrained by the company’s geographic concentration in four cities that account for about 60% of Guorui's total sellable resources, the agency said.

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