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China property developers to see leverage improve: Moody's

2019-10-13 15:17

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BEIJING, Oct. 13 (Xinhua) -- China's property developers will see lower leverage in the next 12 to 18 months as revenue growth outpaces debt growth, a report showed.

Credit metrics of 53 Chinese developers rated by Moody's will improve during the period on robust revenue growth, a result of strong contracted sales growth in the past two to three years, said a report by the credit rating agency.

The weighted average revenue to adjusted debt ratio of the 53 developers will increase to 70 percent to 75 percent in the next 12 to 18 months from 62 percent for the 12 months ended June 30, 2019, the agency predicted.

Large-scale developers will drive the overall leverage improvement across rating categories, due to strong contracted sales growth in the past few years.

Authorities have been tightening control on a variety of financing by developers as part of a broader deleverage campaign in the country.

Government efforts to control debt funding to the property sector will slow the developers' business growth and debt growth in 2019 and 2020, the report said.
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