Moody’s rates China Cinda notes Baa1

Moody's Investors Service said it assigned a provisional Baa1 and provisional P-2 senior unsecured rating to the medium-term note program of China Cinda Finance (2017) I Ltd. (Cinda Finance I).

Moody's also said it assigned a Baa1 rating to the proposed senior unsecured notes to be issued by Cinda Finance I under the program.

The outlook is stable.

Cinda Finance I is wholly owned by China Cinda (HK) Holdings Co. Ltd., which is in turn wholly owned by China Cinda Asset Management Co., Ltd.

The rating on the notes reflects China Cinda Asset’s ability and very high willingness to support Cinda Finance I's obligations, Moody’s said.

The notes issued under the program will be guaranteed by China Cinda (HK) and supported by deeds between Cinda Finance I, China Cinda (HK), China Cinda Asset and the program trustee, the agency said.

Moody's also said it believes that a failure by China Cinda Asset to support Cinda Finance I's notes would result in significant reputational risk and would negatively affect the former's ability to access the onshore and offshore bond and bank loan markets.

The one-notch difference between China Cinda Asset’s long-term issuer rating and Cinda Finance I's note and program ratings reflects the potential different priority of claims for noteholders and uncertainties over the ability of the keepwell provider to obtain approval to transmit resources to the offshore platform, given China's capital account regulations, the agency explained.

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