Moody’s assigns B1 to Sunac notes

Moody’s Investors Service said it assigned a B1 rating to the proposed senior unsecured dollar-denominated notes to be issued by Sunac China Holdings Ltd.

The B1 rating reflects the risk of structural subordination, given the majority of claims are at the operating subsidiaries and have priority over the holding company in a bankruptcy scenario, Moody’s said.

The company plans to use the proceeds mainly to refinance debt.

“The proposed notes will lengthen Sunac’s debt maturity profile and will not have a material impact on its credit metrics, because the proceeds will mainly be used to refinance its existing debt,” said Danny Chan, a Moody’s assistant vice president and lead analyst for Sunac, in a press release.

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