Moody's upgrades China Merchants bond

Moody's Investors Service said it upgraded China Merchants Land Ltd.’s $500 million 4.021% credit-enhanced bonds due 2018 to A1 from A2 following the assignment of an A1(cr) counterparty risk assessment to the standby letter of credit provider, Industrial and Commercial Bank of China (Asia) Ltd.

The rating was placed on review for upgrade on March 20. The agency said the review was prompted by the introduction of the counterparty risk assessments as part of Moody's bank methodology update announced on March 17 and the update to its credit substitution methodology.

Moody's analysis of the transaction is based primarily on Industrial and Commercial Bank of China (Asia)'s support for the payment of the bonds through a standby letter of credit. As such, the rating on the bonds is directly linked to Industrial and Commercial Bank of China (Asia)'s credit quality.

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