Fitch revises Hysan view to negative

Fitch Ratings said it revised the outlook on Hysan Development Co. Ltd. to negative from stable and affirmed the long-term foreign-currency issuer default rating at A-. Fitch also affirmed Hysan's senior unsecured ratings and the $4 billion medium-term note program issued by Hysan (MTN) Ltd. at A-. Finally, the agency affirmed subsidiary Elect Global Investments Ltd.'s U.S. dollar subordinated perpetual capital securities at BBB.

“The negative outlook reflects Hysan's weaker interest coverage, driven by rising investments under a high and increasing interest-rate environment. Hysan's investment-property (IP) EBITDA interest cover dropped to 2.6x in 1H22 and Fitch forecasts a gradual recovery to 3.1x by 2024, which is below our negative trigger of 3.5x.

“We think Hysan's liquidity position is solid and it has the resources and ability to reduce debt and improve interest cover via asset monetization. However, there is uncertainty over the execution of its plans. Fitch may take further negative rating action if no progress is made to improve its IP EBITDA interest cover towards 3.5x in the near-to-medium term,” Fitch said in a press release.

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