Fitch lowers Tahoe view to stable

Fitch Ratings said it revised the outlook to stable from negative on Tahoe Group Co., Ltd.'s long-term foreign-currency issuer default rating and affirmed the issuer default rating at B-.

Fitch also said it affirmed the senior unsecured rating at CCC+ with a recovery rating of RR5.

The revised outlook reflects Tahoe's ongoing improvement in liquidity with the unrestricted cash and short-term debt ratio increasing to 0.4x by year-end 2019, from 0.2x in 2018, the agency said.

This is thanks to a stronger cash collection ratio from property sales and limited expenditure on land acquisition, Fitch explained.

Tahoe's leverage, as measured by its net debt-to-adjusted inventory, improved another 4 points in the first quarter of 2019 from 75% in 2018 and compared to 83% in 2017, the agency noted.

Management also is taking action to manage the company's liquidity, such as disposing project stakes to Shimao Property Holdings Ltd., enhancing cash collection and committing to minimal expenditure on land acquisition, Fitch said.

The ratings are constrained by the company's persistently high leverage due to its aggressive land acquisitions before 2018, the agency said.

© 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.