Fitch Ratings upgraded Zhenro Properties Group Ltd.'s long-term foreign currency issuer default rating to B+ from B, with a stable outlook.
The rating agency said Sept. 10 that the upgrade comes after the Chinese real estate developer repaid its debt through an equity issuance and internally generated cash flow, which lowered the company's leverage to about 51% from 55% in the first half.
Fitch believes Zhenro Properties Group can sustain leverage at approximately 50% as it pursues a less aggressive growth strategy than in the past two years.
The rating agency said the company's high-quality and diverse land bank, healthy contracted sales growth, sales churn and good margin support its issuer default rating. It added, however, that its rating is constrained by a small land bank, which creates some pressure to replenish land and limits room for significant deleveraging.
