S&P rates Powerlong notes B-

S&P 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 issued 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, S&P explained.

The proceeds will be used to refinance the company’s existing debt, the agency said.

Powerlong's performance in the first half of 2016 was largely in line with expectations, S&P said.

Its revenue grew 32% compared with the same period last year, the agency said, while EBITDA margin improved to more than 30%.

S&P said the company has remained disciplined in land acquisitions so far this year, spending only about RMB 1.2 billion on land premiums.

Powerlong's cash flow and leverage ratios also are expected to continue improving this year as the company increases its sales in top-tier cities with better demand, the agency added.

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