S&P rates Citic notes A-

S&P said it assigned an A- long-term issue rating and cnAA- long-term Greater China regional scale rating to a proposed drawdown of Citic Ltd.’s medium-term note program.

Citic is a core subsidiary of Citic Group, the agency explained, and the notes will rank equally with all other senior unsecured debt of Citic Ltd.

The proceeds will be used for general corporate purposes and possibly refinance debt, S&P said.

The ratings on the drawdown were equalized with the company’s corporate credit rating, the agency said.

The company's financial business is highly regulated and its resources may not be fungible for repayment of parent-level liabilities, S&P explained.

However, the agency said it expects Citic’s extensive geographical and business diversification to reduce the structural subordination risk associated with debt at the parent level.

The company has a negative outlook, reflecting a view that the capitalization of the company's banking business is under pressure due to China's rising economic risks, S&P added.

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