Fitch gives Guangdong Helenbergh, debt B+

Fitch Ratings said it published Guangdong Helenbergh Estate Group Co., Ltd.'s long-term foreign-currency issuer default rating of B+ and a senior unsecured rating of B+/RR4.

The outlook is stable.

Fitch said the ratings are supported by Helenbergh's geographically diversified land bank across five regions in China, which mitigates its land bank's weaker quality as more than 90% of the land area is in lower-Tier 2 and Tier 3 cities.

Its contracted sales of over RMB 25 billion a year compares favorably with most B rated peers with RMB 10 billion to RMB 15 billion in sales, but is small compared to BB- rated peers, which mostly have over RMB 30 billion in contracted sales, Helenbergh's leverage (defined as net debt/adjusted inventory) of 40%-45%, and EBITDA margin (excluding capitalized interest in cost of goods sold) of about 20% reflect a healthy financial profile to support its B+ ratings, the agency explained.

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