S&P rates HK Zhiyuan bonds BB

Standard & Poor's said it assigned a BB long-term corporate credit rating to HK Zhiyuan Group Ltd., along with a cnBBB- long-term Greater China regional scale rating.

S&P also said it assigned a BB long-term issue rating and cnBBB- long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured bonds that Zhiyuan unconditionally and irrevocably guarantees.

Zhiyuan Group (BVI) Co. Ltd., an offshore subsidiary of Zhiyuan, will issue the notes.

The outlook is stable.

Zhiyuan is the 100%-owned and sole offshore debt-financing subsidiary of Jiangsu NewHeadLine Development Group Co. Ltd., which is wholly owned by the Lianyungang municipal government.

The ratings reflect HK Zhiyuan’s status as a highly strategic subsidiary of Jiangsu NewHeadLine, S&P said. The two entities are strategically, financially and operationally integrated, the agency said.

The company also would like receive extraordinary government support indirectly through its parent, if needed, S&P said.

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