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Moody's affirms Greenland Hong Kong's ratings

Moody's affirmed Greenland Hong Kong Holdings Ltd.'s Ba2 corporate family rating, with a stable outlook.

The rating agency said Sept. 25 it also affirmed the (P)Ba3 backed senior unsecured rating on the real estate developer's medium-term note program, as well as the Ba3 and the Ba3 backed senior unsecured ratings on its U.S. dollar notes.

Moody's said the affirmation and stable outlook reflect Greenland Hong Kong's improving standalone credit profile and a one-notch rating uplift for expected financial and operating support from parent company Greenland Holdings Corp. Ltd. The agency added that Greenland Hong Kong's corporate family rating is constrained by its parent company's credit profile.

The agency expects Greenland Hong Kong's revenue/adjusted debt to remain between 85% and 90% in the next 12-18 months and its land acquisitions at between 30% and 35% of contracted sales. In addition, the company's EBIT/interest coverage will decline to 3.6x to 3.9x over the next 12-18 months, from 4.3x in the year ended June 30.

Meanwhile, the company's contracted sales are likely to grow to up to 60 billion yuan in the next 12-18 months, the agency said.

As of Sept. 25, US$1 was equivalent to 7.13 Chinese yuan.