S&P: China South City notes B-

S&P said it assigned a B- long-term issue rating and cnB long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured notes by China South City Holdings Ltd.

The agency said it expects China South City to use the proceeds primarily for refinancing of existing debt, including the potential redemption of the remaining $200 million 8¼% senior notes due in 2019.

The company has already redeemed the first $200 million of the same notes in February 2017 with proceeds from notes issuances in September and October 2016, S&P said.

China South City also intends to use a portion of the proceeds to repay maturing bank loans, the agency said.

The new issuance helps the company reduce its interest expense, lengthen debt maturity profile and lower refinancing needs for fiscal 2018, S&P said.

The company is expected to achieve moderate sales recovery in the financial year ending March 2017 and reach its target of HK$7.5 billion to HK$8.5 billion, the agency said.

But the operating environment of trade centers in China remains challenging and China South City’s performance is likely to remain weak in fiscal 2018, S&P added.

© 2015 Prospect News.
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