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Fitch affirms Poly Developments' ratings

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Fitch affirms Poly Developments' ratings

Fitch Ratings affirmed Chinese homebuilder Poly Developments and Holdings Group Co. Ltd.'s long-term foreign-currency issuer default rating at BBB+, with a stable outlook.

The rating agency also affirmed the company's foreign-currency senior unsecured ratings and its rated issues at BBB+.

Fitch said Poly's ratings were supported by a one-notch uplift from its modest linkages with its state-owned parent China Poly Group Corp., in line with Fitch's parent and subsidiary rating linkage criteria.

According to a note, Poly's ratings are backed by the company's large scale and good-quality land bank in Tier 1 and Tier 2 cities. Poly's growing nondevelopment business also produces steady income that increases the company's debt service capacity.

However, the ratings are restrained by Poly's rising leverage, following speedy expansion in 2017 and sluggish cash collection in the first half of 2018. Fitch expects Poly to deleverage in the coming years.