Moody's rates Chouzhou notes Baa3

Moody's Investors Service said it affirmed the Baa3 issuer rating of Yiwu State-Owned Capital Operation Co., Ltd. (YSCO) and Baa3 senior unsecured rating of Chouzhou International Investment Ltd.

The outlook is stable.

Moody's also said it assigned a Baa3 senior unsecured rating to the proposed dollar-denominated notes to be issued by Chouzhou International and guaranteed by YSCO.

The proceeds will be used to invest in key infrastructure construction projects and for general corporate purposes, the agency said.

The Baa3 rating on the proposed notes reflects the irrevocable and unconditional guarantee provided by YSCO, Moody's noted.

The ratings combine the company's Ba3 baseline credit assessment and the strong likelihood of support from, and a high level of dependence on, the government of China if needed, the agency explained.

The ratings also consider the company's 100% ownership by the Yiwu government, its status as a core platform for managing and operating about 90% the city's assets and its monopoly position in urban utility services, Moody's said.

The ratings are constrained by the company's sizable investment requirements for infrastructure construction and affordable housing projects over the next 12 to 18 months, the agency said.

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