S&P rates Powerlong notes B

S&P said it assigned its B long-term issue rating to Powerlong Real Estate Holdings Ltd.’s proposed dollar-denominated senior unsecured notes.

“We rate the notes one notch below the issuer credit rating on Powerlong (B+/positive/--), given significant subordination risk in the China-based property developer’s capital structure. As of June 30, 2020, Powerlong’s capital structure consisted of Chinese renminbi (RMB) 31.4 billion in secured debt and RMB27.9 billion in unsecured debt. The company’s secured debt ratio of 53% is above our 50% threshold for notching down, and we expect the ratio to remain at this level,” S&P said in a press release.

The notes will not significantly affect Powerlong’s credit profile because it plans to use the proceeds to refinance debt, the agency said.

The outlook is positive.

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