Moody's rates Vanke Real Estate notes Baa2

Moody's Investors Service said it assigned a Baa2 senior unsecured rating to the proposed dollar-denominated 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 proceeds will be used to refinance offshore indebtedness and for general corporate purposes, Moody's said.

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

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

The ratings also consider its mid-sized scale of its operations in Mainland China and its fairly diversified geographic coverage, the agency said.

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