Moody's rates Wuhan Metro notes A3

Moody's Investors Service said it assigned an A3 senior unsecured rating to the proposed senior perpetual securities to be issued by Wuhan Metro Group Co., Ltd.

The outlook is stable.

The proceeds will be used to finance certain eligible green projects.

The rating reflects the fact that the proposed senior perpetual securities will rank pari passu with all other senior unsecured obligations of Wuhan Metro, Moody's said.

The company's overall credit profile will not be materially affected by the proposed perpetual securities issuance, considering the issuance's scale is manageable to Wuhan Metro, the agency said.

The proposed senior perpetual securities are considered as debt despite the possession of certain hybrid-like features, Moody's noted.

The high step up cost of 300 basis points has created strong incentive for the company to prepay the securities upon the first call date in 2021, the agency added. The ratings also recognize the very high likelihood of support for the company and high level of dependence from the Wuhan government and ultimately the government of China if needed, Moody's said.

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