Moody's rates Li & Fung bond A3

Moody's Investors Service said it assigned an A3 rating to the proposed bonds to be issued by Li & Fung Ltd.

The outlook is stable.

The proposed issue is a re-tap of the $400 million 5¼% 2020 notes issued in May. The proceeds will be used primarily for business development and acquisitions.

The rating allows for the incremental bond issuance, which will be used mainly for expansion, Moody's said. The three acquisitions and the four licensing deals recently announced were consistent with such an expansion strategy, the agency said.

The rating incorporates the company's strong and unique competitive position in the global sourcing industry, Moody's said, adding that it is further supported by management's operating and financial track record over industry cycles.

Tempering these strengths in the near term are the company's strong appetite for acquisitions and the lackluster economic outlook for its core sales markets of Europe and the United States, the agency said.

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