Fitch rates Bluestar Finance securities BBB+

Fitch Ratings said it assigned an expected rating of BBB+ to Bluestar Finance Holdings Ltd.'s proposed dollar-denominated senior perpetual capital securities.

The proposed senior perpetual securities will be unconditionally and irrevocably guaranteed by Bluestar Finance's parent, China National Bluestar (Group) Co, Ltd., Fitch said.

The proceeds will be used for refinancing purposes, the agency said.

Fitch said it expects to accord no equity credit to the proposed perpetual capital securities in its evaluation of Bluestar's capital structure and leverage, Fitch said, as this instrument ranks pari passu with Bluestar's senior unsecured obligations.

The proposed perpetual securities, although they are senior obligations, are rated one notch lower than Bluestar's A- issuer default rating, the agency said.

This one-notch difference reflects the notes' coupon deferral feature.

Bluestar is 64% owned by China National Chemical Corp. Ltd., (ChemChina), Fitch said.

The ratings are equalized to the ratings of its parent due to the strong legal, operational and strategic ties between them, the agency said.

The successful acquisition of Swiss seeds and agrochemicals group Syngenta AG in 2017 raises ChemChina's overall strategic importance to the Chinese agriculture and food industry, as Syngenta is the world's third largest seed company and one of the four dominant producers of genetically modified seeds, Fitch said.

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