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Fitch: Future Land's Ratings Not Impacted By Consent Solicitation
August 20, 2014 / 3:26 AM / 3 years ago

Fitch: Future Land's Ratings Not Impacted By Consent Solicitation

(The following statement was released by the rating agency) HONG KONG, August 19 (Fitch) Fitch Ratings says today that ratings on Future Land Development Holdings Limited (Future Land; B+/Stable) and its US dollar and offshore yuan denominated bonds due 2018 and 2016 respectively will not be impacted even if the proposed amendments in a consent solicitation announced on 20 August 2014 are adopted. The purpose of the consent solicitation is to make the indenture of the 2018 US dollar bonds and 2016 offshore yuan bonds conform to the terms of the US dollar bonds due 2019. Major proposed amendments of the indenture include: lowering the minimum fixed-charge coverage ratio that the company must maintain to 2.75x from 3.0x; additional exceptions, known as carve-outs, to payment restrictions, including allowing the company to invest in shares of a restricted subsidiary held by a minority shareholder; and raising the caps on permitted indebtedness to 30% of total assets for the purchase price of assets, trust financings, investment properties, secured bank deposits, and guarantees on third parties. The proposed amendments will loosen the existing indentures on the bonds due 2016 and 2018, but the changes facilitate Future Land's business operation and are not material, especially since the bonds due 2019 already feature the looser indentures. If the proposed indenture changes are adopted, Fitch expects Future Land to have greater investment and financial flexibility to rearrange its business strategy or corporate structure. For a more detailed discussion on Future Land's rating, see "Fitch Affirms China's Future Land at 'B+'; Stable Outlook" dated 27 January 2014 at Contact: Andy Chang Associate Director +852 2263 9914 28th Floor, Two Lippo Centre 89 Queensway, Hong Kong Vanessa Chan Director +852 2263 9559 Kalai Pillay Senior Director +65 6796 7221 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: Additional information is available at ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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