S&P: Country Garden notes BB-

Standard & Poor's said it assigned a BB- rating and cnBB+ Greater China regional scale rating to a proposed issue of 10-year dollar-denominated senior unsecured notes by Country Garden Holdings Co. Ltd.

The proceeds will be used to refinance its existing debt and for general corporate purposes.

The rating on the proposed notes is one notch lower than the company's corporate credit rating to reflect a view that offshore noteholders would be materially disadvantaged, compared with onshore creditors, in the event of default, S&P said.

The ratings reflects the company's sales concentration in Guangdong province and its exposure to market risk in third- and fourth-tier cities where the depth of the market and sensitivity to economic cycles may not support a large supply, S&P said.

The ratings also consider the negative outlook for the Chinese property sector and the continued challenging operating conditions for the next six to 12 months, the agency said.

These risks are tempered by the company's strong track record in Guangdong province, its large scale and low-cost land bank, as well as improving execution, S&P added.

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