Fitch: Zhuhai Huafa bond BBB

Fitch Ratings said it assigned long-term foreign- and local-currency issuer default ratings of BBB to Zhuhai Huafa Group Co., Ltd. with stable outlook.

Fitch also said it assigned an expected BBB rating to a proposed Chinese yuan-denominated senior unsecured bond to be issued by Huarui Investment Holding Co. Ltd.

Huarui is an indirect wholly owned subsidiary of Zhuhai Huafa.

The bond will be unconditionally and irrevocably guaranteed by Zhuhai Huafa.

The bond constitutes direct, unconditional, unsubordinated and unsecured obligations of Huarui, Fitch said, and will rank pari passu with other present and future unsecured and unsubordinated obligations.

The proceeds will be used for general corporate purposes, the agency said.

Zhuhai Huafa’s ratings are credit-linked to the Zhuhai municipality, Fitch said, reflected by the municipality’s 100% ownership, strong municipal oversight of its financials and strategic importance of Zhuhai Huafa’s public-sector business to the municipality.

The agency said it believes these factors result in a high certainty of extraordinary support from the municipality, if needed.

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