S&P rates Powerlong notes B-

Standard & Poor’s said it assigned a B- long-term issue rating and cnB+ long-term Greater China regional scale rating to a proposed issue of Chinese-renminbi-denominated senior unsecured notes by Powerlong Real Estate Holdings Ltd.

The rating is subject to a review of the final issuance documentation.

The rating is one notch lower than the long-term corporate credit rating on Powerlong because of structural subordination risk, S&P said.

The agency said it expects Powerlong to use the proceeds from the proposed notes to refinance certain existing debt and for general corporate purpose, the agency said.

The ratings reflect the company’s diversified product and markets, S&P said, and significant and increasing size of recurring income.

Powerlong’s low profit margins and uncertainty over operational stability of new malls temper these strengths, the agency said.

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