Moody's rates China Oriental notes Ba1

Moody's Investors Service said it assigned a Ba1 corporate family rating to China Oriental Group Co. Ltd. and a Ba1 senior unsecured rating to the company's proposed dollar-denominated notes.

The outlook is stable.

The proceeds will be used to fund working capital, including possibly the acquisition of steel mills in China and investments in iron ore assets.

The ratings reflect the company's position as the largest maker in China of H-sections, a key steel product in infrastructure construction, Moody's said.

The company's projected credit metrics are sound, including adjusted debt-to-EBITDA of about 2.0x, Moody's said.

The rating is constrained by two primary credit concerns - the company's low self-sufficiency in raw materials and its exposure to industry and regulatory risk, the agency said.

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