Fitch revises Hongkun view to negative

Fitch Ratings said it revised the outlook on Beijing Hongkun Weiye Real Estate Development Co., Ltd. (Hongkun) to negative from stable and affirmed the B long-term foreign-currency issuer default rating. The agency also affirmed the senior unsecured rating for Hongkun and subsidiary Hongkong Ideal Investment Ltd. and its outstanding bonds at B with an RR4recovery rating.

“The outlook revision reflects the company's increased refinancing risks amid a challenging funding environment, especially in refinancing its unsecured onshore and offshore bonds maturing this year. The revision also reflects its increase in leverage –– measured by net debt to adjusted inventory –– to 59.6% in 2020 from 53.6% in 2019, as a result of a decrease in cash collection,” Fitch said in a press release.

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