Moody's: ENN Energy unchanged

Moody's Investors Service said that ENN Energy Holdings Ltd.'s proposed issuance of convertible bonds will improve its debt maturity profile and lower the risk of structural subordination.

However, Moody's said it does not expect the issuance to have an immediate impact on ENN's Baa3 rating and stable outlook.

ENN plans to issue $500 million five-year zero-coupon convertible bonds, which represent about 6.9% of the enlarged issued share capital once the bonds are exercised, the agency said.

ENN's debt maturity profile will improve after the issuance because it plans to use $400 million of the proceeds to repay current short-term debt, said Ivan Chung, a Moody's analyst.

The company also will save about RMB 165 million in annual interest payments, Chung added.

By replacing the debt at its subsidiaries with the proposed convertible bonds at its holding company, ENN will lower the risk of structural subordination for its offshore bondholders, Chung said.

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