Fitch rates Guangzhou Communications bond A-

Fitch Ratings said it assigned long-term foreign- and local-currency issuer default ratings of A- to Guangzhou Communications Investment Group Co., Ltd.

The outlook is stable.

Fitch also said it assigned an expected A- rating to a proposed dollar-denominated senior unsecured bond to be issued by Express (BVI) 2015 Ltd.

The bond will be unconditionally and irrevocably guaranteed by Dynasty Easy Ltd., a wholly owned subsidiary of Guangzhou Communications.

The proceeds will be used for general corporate purposes.

In place of a guarantee, Guangzhou Communications granted a keepwell and liquidity support deed and a deed-of-equity interest purchase undertaking to ensure Dynasty Easy has sufficient assets and liquidity to meet its obligations under the guarantee for the proposed bond, which will be Guangzhou Communications’ first issuance of offshore debt, Fitch said.

The bond is rated at the same level as Guangzhou Communications’ issuer default ratings, given its strong linkage with Dynasty Easy and because of the deeds, the agency said.

The ratings reflect the municipality’s 100% ownership of the company, municipal oversight of its financials and the strong strategic importance of company’s public sector business to the municipality, Fitch said.

These factors result in a high likelihood of extraordinary support, if needed and, therefore, mitigate any potential subordination of the proposed offshore bond to Guangzhou Communications’ domestic obligations, 64% of which are secured, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.