Fitch rates Fujian Zhanglong bonds BB+

Fitch Ratings said it assigned an expected rating of BB+ to Fujian Zhanglong Group Co., Ltd.'s proposed tap of its dollar-denominated senior unsecured bonds.

The tap issuance will carry the same terms and conditions as the earlier issuance of $150 million of 4˝% notes due 2019.

The offshore notes will be issued directly by Fujian Zhanglong, Fitch said, and the proceeds will be used for working capital and general corporate purposes.

The proposed bonds are rated at the same level as the company’s issuer default rating as the bond will constitute a direct, unconditional, unsubordinated and unsecured obligation of Fujian Zhanglong, the agency said, and rank at least pari passu with all of the company's other unsecured obligations.

The ratings are credit-linked, but not equalized with, an internal assessment of the creditworthiness of Zhangzhou municipality, Fitch explained.

The link is due to strong government control and oversight of the company, its strategic importance to the municipality and its integration with the government budget, the agency said.

The municipality is the fastest growing economy in China's southern Fujian province, Fitch added.

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