Moody’s rates China Railway securities A3

Moody's Investors Service said it assigned an A3 rating to the senior guaranteed perpetual securities to be issued by CRCC Yupeng Ltd. (unrated) and guaranteed by China Railway Construction Corp Ltd. (CRCC, A3 stable).

Proceeds will be used for general corporate purposes.

The outlook is stable.

"We consider CRCC's proposed perpetual bonds as 100% debt-like securities and have not applied notching to reflect subordination risk," Moody's vice president Chenyi Lu said in a news release.

The proposed bonds have hybrid-like features, defer coupons on a cumulative basis and offer no put options to investors. But the high cost of step up and the dividend stopper could pressure the company to prepay the bonds, and hence Moody's treats the bonds as debt.

© 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.