Europe/Asia/Emerging RE - Ratings and Research
Moody's: Hopson Development ratings not impacted by purchase
November 03, 2009 3:31 PM ET
By Tahir Saleem
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Moody's said Nov. 3 that it expects Hopson Development Holdings Ltd.'s purchase of 100% of Panyu Zhujiang Real Estate Ltd. to have no immediate effect on its B2 corporate family and B3 senior unsecured debt ratings or its negative ratings outlook. Moody's assistant vice president and analyst Kaven Tsang said in a statement that the acquisition will not affect Hopson's liquidity profile, as it will be fully funded by a new equity issuance to its chairman. "Though Hopson may have to incur additional costs to negotiate with the local government for re-designating part of the newly acquired land to be used for commodity residential/commercial housing purpose rather than for economic housing, it is difficult to ascertain the amount of additional costs at this stage," Tsang said. Hopson's ratings may come under pressure if the investments turn out "to be significant and adversely" affect the company's profitability and credit profile, the analyst said, adding, "Related party transaction could raise Moody's concern over corporate governance and further transactions that involve material fund leakage could also stress the ratings." | 
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