Fitch Ratings has affirmed the Long-Term Foreign-Currency Issuer Default Ratings (IDR) on
It has also affirmed RFHK's senior unsecured rating and the rating on the RFHK-guaranteed notes issued by
At the same time, Fitch has chosen to withdraw the ratings on Guangzhou R&F and RFHK for commercial reasons.
Key Rating Drivers
Loans Deemed to be in Default: Based on the auditor's report in the company's 2022 financial statements,
Unsustainable Capital Structure: The group faces around
Weak Contracted Sales: Contracted sales declined by 52% yoy to
Further Asset Disposals: The company continues to seek to dispose assets to provide additional liquidity, and believes its hotel portfolio can attract investor interest. The company completed
Derivation Summary
The 'RD' rating reflects that the company remains in default on certain bank and other borrowings.
RATING SENSITIVITIES
Sensitivities are not applicable, given the withdrawal of the ratings.
Best/Worst Case Rating Scenario
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Liquidity and Debt Structure
Tight Liquidity: The company had
Issuer Profile
Founded in 1994, Guangzhou R&F is a property developer focusing on medium- and high-end property development. The company also engages in hotel development, commercial operations, property management and architectural and engineering design. RFHK is Guangzhou R&F's wholly owned offshore investment and financing platform.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Guangzhou R&F has an ESG Relevance Score of '4' for Management Strategy, reflecting persistently weak contracted sales and an unsustainable capital structure, despite a debt extension. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
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