Moody’s rates Anhui Transportation bond Baa1

Moody’s Investors Service said it assigned a first-time A3 issuer rating to Anhui Transportation Holding Group Co. Ltd.

Moody’s also said it assigned a provisional Baa1 senior unsecured rating to the proposed bond to be issued by the company’s wholly owned subsidiary, Anhui Transportation Holding Group (H.K.) Ltd.

The proposed bond will be supported by a keepwell- and equity-deeds, Moody’s said.

The outlook is stable.

The proceeds will be used primarily for refinancing and general corporate purposes, the agency said.

The ratings consider an expectation that the company will receive a high level of support from the Anhui provincial government in times of need, Moody’s said.

The assumption of support reflects the joint-default analysis approach by the agency for government-related issuers.

The company’s Baa3 baseline credit assessment reflects Anhui Transport’s dominant position in the local toll road and bus transportation sectors, supported by its synergistic business portfolio, Moody’s said.

The ratings also consider the strong growth demand for its services and favorable government policies, the agency said.

The ratings are constrained by China’s evolving tariff-setting framework, including uncertainty about toll road tariff increases over time, Moody’s added.

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