S&P rates Oceanwide notes B

S&P said it assigned a B long-term issue rating and cnB+ long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured notes that Oceanwide Holdings Co. Ltd. and China Oceanwide Group Ltd. will guarantee.

Oceanwide's fully owned special purpose vehicle Oceanwide Holdings International 2017 Co. Ltd. will issue the notes, S&P said.

The ratings are the same as that on Oceanwide because the company unconditionally and irrevocably guarantees the notes, the agency explained.

Oceanwide's payment obligations under the guarantee will rank at least equally with all its other present and future unsecured and unsubordinated obligations, S&P said.

The proceeds will be used to refinance its higher cost borrowings, specifically to redeem early the outstanding $320 million 12% senior notes due 2019 callable in September 2017, the agency said.

Earlier this month, Oceanwide issued a $200 million 364-day bond to refinance maturing offshore bank debt, S&P noted.

The company is expected to continue experiencing tight liquidity given its large refinancing needs, the agency said.

Oceanwide also is expected to face challenges in sales execution in 2017 given its significant project concentration in Beijing, Wuhan and Shanghai, which are subject to a strict tightening policy on housing prices, S&P said.

Weak cash flow from property sales may cause its debt level to rise further despite limited new land acquisition, the agency added.

© 2015 Prospect News.
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