S&P rates Zhenro notes B-

S&P said it assigned a B- long-term issue rating to a proposed issue of dollar-denominated senior notes by Zhenro Properties Group Ltd.

The proceeds will be used to refinance its existing indebtedness, S&P said.

The agency said it rated the proposed senior notes one notch lower than the issuer credit rating on Zhenro to reflect structural subordination risk, S&P said.

By the end of 2018, Zhenro's capital structure consists of RMB 38.3 billion in secured debt, as well as RMB 14.1 billion in unsecured debt, the agency noted.

As such, Zhenro's priority debt ratio is about 73%, which is significantly higher than 50%, S&P said.

The new issuance will mildly improve Zhenro's capital structure if the company uses the proceeds to pay down short-term financing, such as trust loans, S&P said.

But the impact on Zhenro's credit profile will unlikely be significant given the company's material short-term debt position, the agency said.

The company also is expected to maintain high growth in contracted sales and revenue with a strong project pipeline, which should partly offset its debt growth, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.