S&P rates Sichuan Languang notes B

S&P said it assigned its B long-term issue rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by Hejun Shunze Investment Co. Ltd., an indirectly owned subsidiary of Sichuan Languang Development Co. Ltd. (B+/stable/--).

Languang unconditionally and irrevocably guarantees the notes.

“The issuer credit rating on Languang reflects our view that the company's leverage will remain high at 7.0x-7.5x debt-to-EBITDA over the next two years. At the same time, we expect the company to maintain below average margins and a small land bank,” S&P said in a news release.

“The company's established position in Sichuan, good sales execution, and reasonable capital structure, with a balanced maturity schedule and limited dependence on alternative financing, temper these weaknesses.”

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