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Fitch revises Golden Wheel Tiandi outlook to negative, affirms ratings

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Fitch revises Golden Wheel Tiandi outlook to negative, affirms ratings

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.