S&P rates CIFI notes B+

Standard & Poor’s said it assigned a B+ long-term issue rating and cnBB long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured notes by CIFI Holdings (Group) Co. Ltd.

The issue rating is one notch lower than the company’s long-term corporate credit rating to reflect the structural subordination risk, S&P said.

The proceeds will be used to refinance CIFI’s existing debts, acquire new projects or land for development and to develop existing projects, the agency said.

CIFI’s good sales execution, strategic focus on end-user demands in top-tier cities and the recent relaxation of the Chinese government’s measures toward the property sector and credit loosening are expected to underpin CIFI’s sales performance in 2015, S&P said.

But, the agency said it forecasts that CIFI’s debt-to-EBITDA ratio will slightly weaken to 4x to 5x in 2015 from 3.8x in 2014 and it is more aggressive in land acquisitions this year.

Nevertheless, S&P said it anticipates revenue growth to offset the debt increase over the same period, leading to only a marginal increase in leverage.

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