S&P: Weichai Power notes BBB-

S&P said it assigned a BBB- rating to the proposed dollar-denominated senior perpetual securities that Weichai Power Co. Ltd. will guarantee.

The rating is one notch lower than the company's corporate credit rating due to potential distribution deferral risk on the notes, which include an optional deferral feature, S&P said.

The proposed securities will be issued by Weichai's debt-issuing subsidiary, Weichai International Hong Kong Energy Group Co. Ltd., the agency said.

The proceeds will be used to refinance existing borrowings and for general corporate purposes, S&P said.

The proposed perpetual securities will constitute direct, unsecured, unconditional and unsubordinated obligations of Weichai International and will rank pari passu without any preference or priority among themselves, the agency said.

The proposed issuance will have a minimal impact on Weichai, since the majority of the proceeds will be used to repay existing debt, S&P said.

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