China Hongqiao#s Senior Unsecured Debt Rating Lowered And Taken Off UCO On Updated Issue Rating Criteria

Stocks and Financial Services Press Releases Thursday September 28, 2017 16:24
HONG KONG--28 Sep--S&P Global Ratings

HONG KONG (S&P Global Ratings) Sept. 28, 2017--S&P Global Ratings said today that it has reviewed its issue-level rating of China Hongqiao Group Ltd.'s senior unsecured debt that was labeled as "under criteria observation" (UCO) after publishing its revised issue ratings criteria, "Reflecting Subordination Risk In Corporate Issue Ratings" on Sept. 21, 2017. With our criteria review complete, we are removing the UCO designation from the rating and are lowering our issue rating on China Hongqiao's US$300 million senior unsecured debt to 'B-' from 'B'. The issue rating remains on CreditWatch with negative implications, where it was placed on March 24, 2017.

The rating action stems solely from the application of our revised issue rating criteria and does not reflect any change in our assessment of the corporate credit rating for the issuer of the affected debt issue.

Our rating action takes into consideration China Hongqiao's capital structure, which consists of around Chinese renminbi (RMB) 13 billion of unsecured debt incurred by China Hongqiao and around RMB54 billion of unsecured debt incurred by its operating subsidiaries as of June 30, 2016. We have therefore arrived at the following analytical conclusions: The US$300 million senior unsecured notes issuance by China Hongqiao is rated 'B-', one notch below the corporate credit rating on China Hongqiao. The notching reflects the significant subordination of these senior unsecured notes relative to other debt in the issuer's consolidated capital structure.

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