Moody’s rates Beijing Infrastructure notes A2

Moody's Investors Service said it assigned an A2 rating to the proposed senior unsecured euro-denominated notes under the $2 billion medium-term note program issued by Eastern Creation II Investment Holdings Ltd. (ECI II) and guaranteed by Beijing Infrastructure Investment (Hong Kong) Ltd. (unrated).

The notes are also supported by a deed of equity interest between ECI II, Beijing Infrastructure HK and Beijing Infrastructure Investment Co. Ltd. (BII, A1 stable). – Beijing Infrastructure HK’s parent – as well as by a keepwell agreement and a liquidity support deed between BII and the bond trustee.

The outlook is stable.

Proceeds will be used to finance capital expenditures and for general corporate purposes.

"The A2 rating reflects BII's close alignment with the Beijing municipal government and its high strategic importance to the local public transport sector," Moody's vice president and senior analyst Ada Li, said in a news release.

"The rating assigned to the notes is supported by the deed of equity interest, the keepwell agreement and the deed of liquidity support; however, the rating on the notes is one notch lower than BII's A1 issuer rating, reflecting the absence of an explicit guarantee from BII."

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