Fitch rates Power Construction debt BBB+

Fitch Ratings said it assigned Power Construction Corp. of China's (A-/stable) proposed dollar-denominated senior perpetual capital securities an expected rating of BBB+(EXP).

The proposed senior perpetual capital securities will be issued by Power Construction’s indirect wholly owned subsidiary Leader Goal International Ltd. under Power Construction’s $2.5 billion medium-term note and senior perpetual securities program. They will be unconditionally and irrevocably guaranteed by Power Construction.

Fitch said it expects to accord no equity credit to the proposed perpetual capital securities in its evaluation of Power Construction’s capital structure and leverage, as this instrument ranks pari passu with the company’s senior unsecured obligations.

The proposed perpetual securities, although they are senior obligations, are rated one notch below the company’s A- issuer default rating in accordance with Fitch's "Non-Financial Corporates Hybrids Treatment and Notching Criteria." This one-notch difference reflects the notes' coupon deferral feature, the agency explained.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.