Moody’s gives PowerChina program Baa1

Moody's Investors Service said it assigned a provisional Baa1 senior unsecured rating to the proposed $2.5 billion medium-term note program of DianJian Haiyu Ltd., Leader Goal International Ltd. and Dianjian International Finance Ltd.

The note program is guaranteed by Power Construction Corp. of China (PowerChina, Baa1 stable).

The agency also assigned provisional Baa1 ratings to the proposed $500 million guaranteed senior perpetual securities to be issued out of the medium-term note program with DianJian Haiyu as the issuing entity.

At the same time, Moody's affirmed PowerChina's Baa1 issuer rating.

Proceeds from the guaranteed senior perpetual securities will be used to finance PowerChina's overseas investment projects and for general corporate purposes.

The outlook is stable.

"The proposed $500 million guaranteed senior perpetual securities are within the amount of new debt forecast by Moody's for 2017 and do not change our expectation that PowerChina's debt leverage will trend below 7x by end-2018," Chenyi Lu, Moody's vice president, senior analyst and international lead analyst for PowerChina, said in a news release.

"PowerChina's RMB 12 billion equity issuance in April 2017 and further earnings ramp-up from its construction backlog and public--private partnership (PPP) investments will support the company's deleveraging efforts," Jin Wu, Moody's vice president, senior analyst and local market analyst, added in the release.

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