S&P rates Powerlong notes B+

S&P said it assigned a B+ long-term issue rating to Powerlong Real Estate Holdings Ltd.'s planned dollar-denominated senior unsecured notes.

“We rate the proposed senior unsecured notes one notch below the issuer credit rating on Powerlong to reflect structural subordination risk. As of Dec. 31, 2020, Powerlong's capital structure consisted of Chinese renminbi (RMB) 34.4 billion in secured debt and RMB 33.6 billion in unsecured debt (including external guarantees). The company's secured debt ratio is 51%. Because we include the unsecured debt at Powerlong's subsidiary levels and external guarantees as priority debt, the company's overall priority debt ratio is 77%, above our 50% threshold for notching down the issue rating,” S&P said in a press release.

Powerlong intends to use the proceeds mainly to refinance debt so the proposed notes will have minimal impact on Powerlong's financial leverage, the agency said.

The outlook is stable.

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