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February 21, 2008 |
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COUNTRY GARDEN: Moody's Assigns Ba1 Rating on Convertible Bonds Moody's Investors Service has assigned a Ba1 rating to Country Garden Holdings Company Limited's CNY3,595 million five years convertible bonds. Moody's has also affirmed Country Garden's corporate family rating of Ba1. The outlook for both ratings remains stable. At the same time, Moody's has withdrawn the company's (P)Ba1 provisional bond rating as the US$1.5 billion bonds were not issued. The proceeds from the bond issue, excluding cash collateral for the equity swap to hedge the cost of a future share repurchase, will be used for repayment of the company's existing debt obligations, funding property projects and for general corporate purposes. "The issuance of the convertible bond, which is to be partly used for debt repayment, will not materially impact Country Garden's debt leverage, as the company's key credit metrics of Debt/Capitalization of 37%-32% and EBITDA/interest of 9x--13x remain within its rating range," says Peter Choy, a Moody's Vice President and Senior Credit Officer. "Despite the fact that the size of the convertible bond is smaller than the originally planned US$1.5 billion bonds, Country Garden will be able to generate adequate cash flow from its 45 development projects as well as utilize its substantial cash holding to support its business plan," Choy adds. Founded in 1997 in China and listed in Hong Kong in April 2007, Country Garden Holdings Co Ltd is one of the leading integrated property developers in China. It has a sizeable land bank of about 50 million square meters gross floor area spreading over 45 projects located in Guangdong, Anhui, Hubei, Hunan, Jiangsu, Inner Mongolia, Liaoning, and Chongqing. |
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