Moody's rates Vanke Real Estate notes Baa2

Moody's Investors Service said it assigned a Baa2 senior unsecured rating to the proposed dollar notes to be issued by Vanke Real Estate (Hong Kong) Co. Ltd. under its $7 billion medium-term note program.

The outlook is stable.

The proposed notes will be supported by a deed of equity interest purchase undertaking and a keepwell deed between China Vanke Co., Ltd., which owns a 100% stake in Vanke Real Estate, the agency said.

The proceeds will be mainly used for refinancing and general corporate purposes, Moody's said.

The new issuance will lengthen China Vanke's debt maturity profile and will not materially affect the company's financial profile because the proceeds will be used partially for the company's refinancing, the agency said.

The Baa2 rating on the notes incorporates Vanke Real Estate's Ba2 standalone credit strength and three-notch rating uplift, reflecting an expectation that China Vanke will provide financial support to Vanke Real Estate in times of stress, Moody's said.

Vanke Real Estate's standalone credit profile reflects the mid-sized scale of its operations in Mainland China and its fairly diversified geographic coverage, the agency said.

The ratings also consider the company's strong track record and branding in China's property market, as well as disciplined financial management with solid financial metrics through the cycles, Moody's said.

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