Fitch gives B to Hong Seng notes

Fitch Ratings said it assigned Hong Seng Ltd.’s proposed dollar-denominated guaranteed senior notes an expected B(EXP) rating with a recovery rating of RR4.

Hong Seng is wholly owned by Hong Yang Group Co. Ltd. (B/stable), which will provide an unconditional and irrevocable guarantee to the proposed notes.

The notes are rated at the same level as Hong Yang's senior unsecured rating because they constitute its direct and senior unsecured obligations.

Fitch said Hong Yang's ratings are supported by its high-quality landbank, which focuses on the city of Nanjing, capital of China's Jiangsu province, and the Yangtze River Delta. This helps drive the company's contracted sales growth and better gross profit margin than its 'B' rated peers.

Hong Yang also has a higher recurring income arising from the larger scale of its property rental business, the agency added.

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