S&P rates China Vanke notes BBB

S&P said it assigned a BBB long-term issue rating and cnA long-term Greater China regional scale rating to a proposed issue of dollar-denominated guaranteed notes under Bestgain Real Estate Lyra Ltd.'s medium-term note program.

Vanke Real Estate (Hong Kong) Co. Ltd., a subsidiary of China Vanke Co. Ltd., unconditionally and irrevocably guarantees the notes.

The outlook is negative.

China Vanke plans to use the proceeds for refinancing and general corporate purposes.

The issue rating on the proposed notes is one notch lower than the corporate credit rating on Vanke Real Estate (Hong Kong) to reflect structural subordination risk, S&P said.

The new issuance is not expected to have a significant impact on China Vanke's financial leverage, the agency explained.

The company is expected to maintain a ratio of debt-to-EBITDA of 2x to 3x over the next 12- to 24-months, S&P said.

The negative outlook reflects a view that the disagreements among major shareholders and management could weaken the company's steady business execution and good financial discipline, the agency noted.

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