S&P rates Gemdale notes BB-

Standard & Poor's said it assigned a BB- rating and cnBBB- Greater China regional scale issue rating to the proposed issue of dollar-denominated benchmark sized senior unsecured notes by Gemdale International Investment Ltd.

Famous Commercial Ltd. and five other offshore subsidiaries of Gemdale Corp. unconditionally and irrevocably guarantee the notes.

The rating is two notches below the long-term corporate credit rating on Gemdale because the agency said Famous and Gemdale are strategically, financially and operationally integrated, S&P said.

The timeliness of the financial support from Gemdale to Famous is uncertain due to China's controls over foreign exchange and capital, the agency said, and uncertainty relating to regulatory approvals.

The ratings reflect the company's low asset turnover and large exposure to the high-end residential property segment, which is vulnerable to unfavorable regulations, S&P said.

But, the company's established market position and geographically diverse operations, its long record of steady growth through market cycles and consistent financial management with good financial flexibility support the ratings, the agency said.

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