Moody’s upgrades China Vanke, Bestgain Real Estate

Moody's Investors Service said it upgraded China Vanke Co., Ltd.'s issuer rating to Baa1 from Baa2.

At the same time, the agency upgraded (a) Bestgain Real Estate Lyra Ltd.’s medium-term note program to provisional Baa2 from provisional Baa3; and (b) Bestgain Real Estate Ltd.’s and Bestgain Real Estate Lyra’s senior unsecured bond rating to Baa2 from Baa3.

The outlooks are stable.

Vanke Real Estate (Hong Kong) Co. Ltd. (unrated), a wholly owned subsidiary of China Vanke, guarantees the medium-term note program of Bestgain Real Estate Lyra and the associated bonds, as well as the bonds issued by Bestgain Real Estate.

All medium-term notes and bonds are supported by a Deed of Equity Interest Purchase Undertaking (EIPU) and a Keepwell Deed between China Vanke, Vanke Real Estate and the bond trustee.

"The upgrade reflects China Vanke's leading market position and its strong performance in contracted sales through the cycles," Moody's vice president and senior credit officer Kaven Tsang said in a news release.

"The upgrade also considers China Vanke's business strategy of disciplined spending on land that has resulted in the lowest debt leverage among peers."

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