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Fitch revises Beijing Capital Development outlook to positive, affirms ratings

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Fitch revises Beijing Capital Development outlook to positive, affirms ratings

Fitch Ratings revised the outlook on Beijing Capital Development Holding (Group) Co. Ltd. to positive from negative and affirmed the company's long-term foreign-currency issuer default and senior unsecured ratings at BBB-.

The outlook revision underscores the rating agency's assessment that the sociopolitical implications of Beijing Capital Development's default could rise, considering its increasing involvement in policy roles after taking over Beijing Real Estate Group Co. Ltd. Further, the company's standalone credit profile stabilized after its leverage improved to below 65% in 2018 and the first half of 2019.

Fitch said it expects the company's leverage to remain below the 65% threshold over the next 18 months based on the company's sufficient land bank and the Beijing State-owned Assets Supervision and Administration's deleveraging requirements for state-owned enterprises. Meanwhile, the company's contracted sales are likely to meet management targets in 2019.