Moody’s: Powerlong bond B3

Moody's Investors Service said it assigned a B3 senior unsecured rating to the proposed dollar-denominated bond to be issued by Powerlong Real Estate Holdings Ltd. and guaranteed by some of the company's subsidiaries.

The outlook is positive.

The proceeds will be used to refinance Powerlong's existing debt, Moody’s said.

The proposed bonds will improve Powerlong's debt maturity and liquidity profile and will have a limited impact on its credit metrics, as the proceeds will be used to repay existing debt, the agency said.

Moody's said it expects Powerlong's credit metrics to slightly improve by year-end 2016 due to a further increase in revenue recognition.

The ratings reflect the track record of developing and selling commercial and residential properties, along with its ability to generate non-development revenue, which improves the stability of its debt servicing and expansion into higher-tier cities where demand for its properties is more favorable, Moody’s said.

The ratings are constrained by execution risk and high level of capital demand associated with its business strategy and high debt leverage, the agency said.

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