Moody’s assigns Powerlong notes B2

Moody’s Investors Service said it assigned a B2 rating to Powerlong Real Estate Holdings Ltd.’s proposed senior unsecured dollar-denominated notes.

“Powerlong’s B1 corporate family rating (CFR) reflects its (1) track record of developing and selling commercial and residential properties; (2) growing recurring revenue, which improves the stability of its debt servicing; and (3) expansion into cities with strong economic fundamentals where demand for its properties is more favorable,” said Cedric Lai, a Moody’s vice president and senior analyst, in a press release.

“However, the company’s credit profile is constrained by execution risk, the high level of capital required for its business strategy and its moderate debt leverage,” added Lai.

Powerlong plans to use the proceeds to refinance offshore debt. The notes will improve Powerlong’s liquidity profile and won’t hurt its credit metrics, because the company will use the proceeds to refinance debt, Moody’s said.

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