S&P rates China Evergrande

S&P said it assigned a B long-term issue rating to the proposed dollar-denominated senior unsecured notes by China Evergrande Group.

S&P said it rates the notes one notch lower than the issuer credit rating on Evergrande to reflect significant structural subordination risk.

The agency said it believes the new issuance will not significantly affect Evergrande's leverage profile because the company intends to use the proceeds partly for refinancing.

Due to the sheer size of the company's gross debt level, the new issuance is unlikely to have a material impact, S&P said.

The developer has the ability to enhance its capital structure and liquidity so long as it can maintain robust contracted sales inflow and further control its spending, the agency explained.

But, Evergrande's capital structure and liquidity remain its key rating constraints despite some improvement in its leverage ratio over the past year, S&P said.

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