Moody’s rates Franshion Brilliant notes Ba2

Moody’s Investors Service said it assigned a Ba2 rating to the dollar-denominated subordinated guaranteed perpetual capital securities to be issued by Franshion Brilliant Ltd. and irrevocably and unconditionally guaranteed by China Jinmao Holdings Group Ltd.

The outlook is stable.

The proceeds of the proposed issuance will be used for general corporate purposes, Moody’s said.

The agency said it considers the proposed perpetual securities as hybrid instruments with a 50% equity component for the purposes of calculating leverage.

The ratings reflect the deeply subordinated nature of the hybrid debt, which ranks behind China Jinmao’s senior debt obligations in terms of the priority of claims and the feature of the hybrid offering an option to defer coupons on a cumulative basis, Moody’s said.

Although the proposed issuance will increase China Jinmao’s debt, its credit metrics will remain within the parameters set for its Baa3 rating level, the agency said.

The issuance will enhance China Jinmao’s already strong liquidity position, Moody’s added.

The ratings also take into account the company’s stable rental income generated from its quality portfolio of investment properties, the agency said.

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