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 dollar-denominated senior unsecured notes by Powerlong Real Estate Holdings Ltd.

The rating is one notch lower than the long-term corporate credit rating on Powerlong to reflect the structural subordination risk.

The proceeds will be used to refinance existing debts.

The ratings reflect the company’s very high financial leverage in support of its expansion into high-tier cities in recent years, S&P said.

The agency also said it believes the company faces some degree of execution risk as the company newly expands into these cities.

However, its sales growth has been decent in these high-tier cities, including Shanghai, S&P said.

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