Fitch rates Huaxing Investment bonds BBB

Fitch Ratings said it assigned an expected long-term foreign-currency rating of BBB to proposed dollar-denominated senior unsecured bonds to be issued by Huaxing Investment Holding Co. Ltd.

Huaxing Investment is an indirect wholly owned subsidiary of Zhuhai Huafa Group Co., Ltd. The bonds will be unconditionally and irrevocably guaranteed by Zhuhai Huafa, Fitch said.

The bonds will constitute Zhuhai Huafa's direct, unconditional, unsubordinated and unsecured obligations and will rank pari passu with other present and future unsecured and unsubordinated obligations, the agency said.

The proceeds will be used for general corporate purposes.

The bond is rated at the same level as Zhuhai Huafa's issuer default rating because the direct guarantee structure transfers the ultimate responsibility of payment to Zhuhai Huafa, the agency said.

The ratings also are credit-linked, but not equal to the ratings on the Zhuhai municipality, Fitch said.

This is due to the company's full municipal ownership, strong oversight of its financials and the strategic importance of Zhuhai Huafa's public-sector business to the municipality, the agency said.

These factors suggest a strong likelihood of extraordinary support from the municipality for Zhuhai Huafa, if needed, Fitch said.

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