S&P rates Franshion notes BB

Standard & Poor's said it assigned its BB issue rating and cnBBB Greater China regional scale rating to Franshion Investment Ltd.'s proposed issue of U.S.-dollar fixed-rate senior unsecured notes. The notes are guaranteed by Franshion Properties (China) Ltd.

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

S&P also said it expects the company's ratio of priority borrowings to total assets to remain above the agency's notching threshold of 15% for speculative-grade debt.

The corporate credit rating on Franshion reflects the company's bb+ stand-alone credit profile and S&P's expectation that Franshion will benefit from extraordinary government support for its parent, Sinochem Hong Kong (Group) Co. Ltd.

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