Moody's upgraded Jiayuan International Group's corporate family rating to B2 from B3, with a stable outlook.
The rating agency said Oct. 8 that it also upgraded its senior unsecured rating on the Chinese real estate developer's U.S. dollar notes to B3 from Caa1.
The upgrade comes as Moody's expects Jiayuan's change of control risks will reduce as a result of a recent equity-funded asset injection and reduced share pledge loans by its chairman Shum Tin Ching.
The agency expects Jiayuan's contracted sales to rise to between 25 billion yuan and 30 billion yuan over the next 12-18 months, compared with 20 billion yuan in 2018. It expects the developer's projected credit metrics to support its corporate family rating, with revenue to adjusted debt ratio to improve to about 70% and EBIT to interest ratio to remain around roughly 3.0x over the next 12-18 months.
The stable outlook reflects Moody's expectation that Shum will not materially increase his share pledge financing and the company's liquidity will remain adequate, while it boosts sales and maintains cash collection as planned over the next 12-18 months.
As of Oct. 7, US$1 was equivalent to 7.15 yuan.
