Fitch might cut LVGEM

Fitch Ratings said it placed LVGEM (China) Real Estate Investment Co. Ltd.’s B+ long-term foreign-currency issuer default rating, senior unsecured rating and the rating on its outstanding $225 million 8½% senior notes due 2020, including that of the bond re-tap announced today, on rating watch negative. The recovery rating is RR4.

Fitch said the negative watch reflects its expectation that LVGEM's leverage, as measured by net debt/adjusted inventory, will increase to over 45% from 2018 if it does not alter its business plan, following a planned HK$9 billion investment in a Hong Kong office building that the company announced on Oct. 11.

“The acquisition falls outside the business plan the company had shared with Fitch and will lead to higher leverage over a sustained period if the company does not generate development sales from the building,” the agency said in a news release.

“Fitch will resolve the RWN upon the completion of the transaction, taking into consideration the company's financial profile after reviewing its revised business plan.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.