S&P gives West China Cement notes B+

Standard & Poor's said it assigned its B+ long-term issue rating and cnBB long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured notes by West China Cement Ltd. (B+/stable/--; cnBB/--).

Proceeds will be used to refinance a portion of the notes maturing January 2016.

In the agency’s view, West China Cement’s "weak" business risk profile reflects the company's small operating scale, single-product and geographic concentration with presence confined to China's Shaanxi province and exposure to cyclical demand and volatile raw material costs. Meanwhile, its good market position in southern Shaanxi and its vertically integrated operations temper these weaknesses.

West China Cement’s planned capital expenditure is in line with S&P’s earlier expectation. Therefore, the agency maintains its "aggressive" financial risk profile as the company's financial leverage, as measured by a ratio of debt to EBITDA, will be 4.0 times to 4.5 times over the next 12 months, with the ratio of funds from operations to debt of 15%-20%.

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