Fitch gives China South City notes B/RR4

Fitch Ratings said it assigned China South City Holdings Ltd.’s (B/stable) proposed dollar-denominated senior notes a B(EXP) expected rating and a recovery rating of RR4.

The notes are rated at the same level as China South City’s senior unsecured rating because they constitute its direct and senior unsecured obligations.

The company intends to use the net proceeds primarily to refinance its existing debt related to the construction and development of its projects, and for general corporate purposes.

Fitch said the ratings are supported by China South City’s well-located property projects, growing non-development income, close collaboration with local governments, a long record in integrated trade center development and sufficient liquidity.

The ratings are constrained by the company’s rising leverage and weak industry outlook.

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