Fitch rates LVGEM notes B+

Fitch Ratings said it assigned a long-term foreign-currency issuer default rating of B+ to LVGEM (China) Real Estate Investment Co. Ltd.

Fitch also said it assigned a senior unsecured rating of B+ with a recovery rating of RR4 to the company.

The agency also said it assigned a B+ rating with recovery rating of RR4 to the proposed dollar-denominated senior notes to be issued by its wholly owned subsidiary Gemstones International Ltd. and guaranteed by LVGEM.

The outlook is stable.

The ratings are supported by the company's strong pipeline of property development projects, which expects to significantly increase the company's scale to above ¥5 billion and widen EBITDA margin to more than 50% from 2017, Fitch said.

The ratings are constrained by LVGEM's small scale compared with other Chinese homebuilders, the agency said.

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