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January 15, 2008 |
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HOPSON DEVELOPMENT: Moody's Affirms Ba2 Ratings After Land Bid Moody's Investors Service has affirmed the Ba2 corporate family rating and senior unsecured debt rating of Hopson Development Holdings Limited. The outlook for both ratings remains stable. The affirmation follows the company's announcement that it has successfully bid for the initial land development of approximately 4.1 square kilometers situated at Houzaiwan, Dayawan Economic and Technology Development Zone, in Guangdong Province, China. The development will entail an aggregate investment of around CNY3 billion and Hopson is expected to complete the process by phases over a period of about 2 years. "The funding requirement at any time will be lower than CNY3 billion as Hopson will receive reimbursements from the municipal government through the sale of parcels of land," says Peter Choy, a Moody's Vice President and Senior Credit Officer, adding, "While the company is expected to raise certain financing for this project, the additional debt will not materially alter its near term credit metrics -- the projected Debt/Cap of around 45-48% remains consistent with the rating." Upon completion of the land development, the municipal government will sell the land in parcels to prospective property developers. Moody's expects Hopson to bid for some of the land to develop its own properties. However, if Hopson funds such land acquisitions aggressively through additional debt, its ratings will come under pressure. Hopson Development Company Holdings Limited is one of the largest property developers in China. Its principal businesses are residential developments in four major cities -- Guangzhou, Beijing, Shanghai and Tianjin -- and their surrounding areas. |
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