Moody’s rates China Minmetals notes Baa1

Moody's Investors Service said it assigned a provisional Baa1 senior unsecured debt rating to the proposed dollar-denominated notes to be issued by Minmetals Bounteous Finance (BVI) Ltd. and guaranteed by China Minmetals Corp.

The outlook is negative.

The proceeds will be used to refinance existing indebtedness and for general corporate purposes, Moody’s said.

The agency said it expects the proposed notes issuance will not materially increase China Minmetals' leverage as the company will use part of the proceeds to refinance its existing debt.

The ratings consider a baseline credit assessment of Ba3 and a five-notch uplift based on an expectation of a very high level of support from the Chinese government, Moody’s said.

The merger with China Metallurgical Group Corp., which should be completed in the third quarter of 2016, will also enhance the group's importance as the key platform for the consolidation of China's metal resource industry and for overseas acquisitions, the agency said.

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