Fitch Ratings revised the outlook on Golden Wheel Tiandi Holdings Co. Ltd. to negative from stable and affirmed the Chinese homebuilder's long-term foreign- and local-currency issuer default ratings at B.
The rating agency said Sept. 17 that it also affirmed Golden Wheel Tiandi's senior unsecured rating at B, with a recovery rating of RR4.
The outlook revision reflects a decline in the company's available cash-to-short-term debt ratio to 28% at June 30 and 26% at end-2018, compared to 97% at the end of 2017. Although Golden Wheel Tiandi has a large asset base for disposal, the company faces execution risks amid a challenging funding environment.
Fitch said it will revise the developer's outlook to stable if it improves and sustains a cash-to-short-term debt ratio of above 80%.
The ratings affirmation reflects the homebuilder's healthy margins, good quality metro-linked property development portfolio compared with its similarly rated peers and a steady income from its non-property development segment. The ratings are constrained by the company's small sales scale and its moderately higher leverage, the agency added.
