Moody’s assigns Sunac China notes B1

Moody's Investors Service said it assigned a B1 rating to Sunac China Holdings Ltd.’s proposed senior unsecured notes.

At the same time, the agency affirmed Sunac's Ba3 corporate family rating and B1 senior unsecured debt rating.

The outlooks are stable.

The company will use the new funding to refinance its existing debt.

"The proposed USD notes will improve Sunac's liquidity position, lengthen the average tenure of its debt portfolio and add stability to its offshore funding," Moody's vice president and senior analyst Franco Leung said in a news release.

Sunac's short-term debt surged to RMB 13.8 billion at end-June 2014 from RMB 7.8 billion at end-2013. As a result, the company's liquidity profile weakened slightly – its cash to short-term debt declined to 1.7 times from 2 times over the same period – despite its increased cash balance. The proposed issuance will help reduce its level of short-term debt.

"The proposed issuance will not have a material impact on Sunac's debt leverage," Leung added in the release.

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