Moody's rates Chang Development bonds Baa1

Moody's Investors Service said it assigned a Baa1 senior unsecured rating to the proposed bonds to be issued by Chang Development International Ltd., a wholly owned subsidiary of Changchun Urban Development & Investment Holdings (Group) Co., Ltd.

The senior unsecured bonds will be unconditionally and irrevocably guaranteed by Changchun Urban.

The outlook is stable.

Changchun Urban plans to use the proceeds of the bond to repay debt stock and general corporate and working capital purposes, Moody's said.

The company's overall credit profile will not be materially affected by the proposed bond issuance as the proceeds will be used for refinancing outstanding offshore debt, the agency said, and the issuance's scale is manageable.

The Baa1 senior unsecured rating of the proposed bond reflects the proposed bonds ranking pari passu with all of the company's other senior unsecured obligations of the company, Moody's noted.

The ratings also consider the company's recurring income from the leasing of its water pipe network to the Changchun municipal government and from its water utility business, the agency said.

These strengths are balanced by the company's policy mandate in city construction, which requires high capital spending and is less commercially viable, Moody's said.

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