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S&P affirms Country Garden's ratings

S&P Global Ratings affirmed Country Garden Holdings Co. Ltd.'s BB+ long-term issuer credit rating, with a stable outlook.

The rating agency also affirmed its BB long-term issue rating on the Chinese real estate developer's outstanding senior unsecured notes.

Ratings' said Sept. 25 that the developer's credit profile remains constrained by its substantial exposure to lower-tier Chinese cities, which make up roughly 60% of its land bank. It added that Country Garden is on track to meet its attributable contracted sales target of 550 billion yuan in 2019, and the company's debt growth is expected to slow in 2019-2020 as it shifts toward operational quality from aggressive scale growth.

The agency expects the company's debt-to-EBITDA ratio to be slightly below 4x in 2020, compared with 3.7x in 2019. It also expects a decline in the company's overall selling price, which is set to reduce the EBITDA margin to 22% to 23% in 2019 and 20% to 21% in 2020, compared with 22.4% in 2018.

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

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found in the sources section.