Moody’s rates China Railway unit notes Baa1

Moody's Investors Service said it affirmed the A3 issuer rating of China Railway Construction Corp Ltd.

The agency also affirmed the A3 rating of the senior unsecured convertible bonds issued by China Railway, the A3 rating of the senior unsecured perpetual bonds issued by CRCC Yupeng Ltd. and guaranteed by China Railway, and the A3 rating of the senior unsecured notes issued by CRCC Yuxiang Ltd. and guaranteed by China Railway.

At the same time, Moody's assigned a Baa1 rating to the proposed subordinated perpetual securities to be issued by CRCC Chengan Ltd. and guaranteed by China Railway.

The proceeds of the proposed issuance will be used to refinance existing debt, for overseas investments and for general corporate purposes.

The outlook is stable.

“The rating affirmation reflects our expectation that CRCC's credit quality will remain broadly stable and within the parameters of its A3 rating over the next one to two years, as higher debt levels will be largely offset by increased earnings,” Chenyi Lu, Moody's vice president and senior credit officer, said in a news release.

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