Yida China Downgraded To 'SD', Issue Rating Lowered To 'D' On Distressed Exchange Completion

  • Yida China Holdings Ltd. has completed the issuance of about US$225 million senior notes to exchange for its outstanding notes due in April 2020.
  • We view the exchange offer as distressed and assess the transaction as tantamount to a default.
  • On March 27, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Yida to 'SD' from 'CC'. At the same time, we lowered our long-term issue rating on the China-based company's senior unsecured notes to 'D' from 'C'.
HONG KONG (S&P Global Ratings) March 27, 2020—S&P Global Ratings today took the rating actions listed above.
We lowered the ratings on Yida following the completion of the debt exchange of its 6.95% senior notes due April 2020 for new senior notes due March 2022. The company issued about US$225 million in new notes, representing approximately 75% of the total outstanding principal amount of the original notes.
We view the transaction as a distressed exchange tantamount to a default because Yida has insufficient internal resources and limited funding options to repay the maturing notes in whole without the debt exchange. We expect the company to repay the remaining US$53 million with internal funds.
We will review Yida's credit profile soon and could raise the ratings after we reassess the company's liquidity and financial performance expectation. Yida will likely continue to see exceptionally weak liquidity and face repayment risks, in particular for its Chinese renminbi (RMB) 800 million domestic corporate bond due in September 2020.
Yida is a business park developer in China. It also develops residential properties in integrated community projects. Yida listed on the Hong Kong stock exchange in 2014. China Minsheng Investment Group Corp. Ltd. became its controlling shareholder in late 2016.

Yida holds a total land bank of 9.8 million square meters gross floor area as of end-June 2019, 70% of which is located in Dalian. Yida owns six business parks and manages 24 parks on behalf of other owners in China.
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