S&P rates Hejun Shunze notes B

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

Languang unconditionally and irrevocably guarantees the notes.

The proceeds will be used for general corporate purposes.

The agency said it rates Sichuan Languang's senior unsecured notes one notch lower than the issuer credit rating because of significant subordination risks from secured debt.

The proposed notes will rank behind a sizable amount of priority debt in Sichuan Languang's capital structure, S&P said.

The agency said it does not expect the new issuance to have a significant impact on the company's credit profile.

The stable outlook reflects a view that Sichuan Languang will improve its cash collection, S&P said, and will maintain stable margins and leverage ratios in the next 12 months.

The agency also said it expects the company to grow its scale moderately and expand its geographical diversity.

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