S&P rates Citic notes BBB+

S&P said it assigned its BBB+ long-term issue rating to a proposed drawdown of the medium-term note program of Citic Ltd., a core subsidiary of Citic Group Corp.

The agency expects Citic Ltd. to use the proceeds for general corporate purposes, including refinancing its outstanding debt.

“We have equalized the issue rating with the issuer credit rating on Citic Ltd. Despite a significant amount of priority debt in Citic Ltd.’s capital structure, we believe the risk of subordination is mitigated by our view that the government may intervene in a bankruptcy process. We see a very high likelihood that the Chinese central government will provide sufficient and timely extraordinary support to Citic Group in the event of financial distress. The notes will rank equally with all other senior unsecured debt of Citic Ltd.,” said S&P in a press release.

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