S&P rates Sunac China notes B+

S&P said it assigned a B+ long-term issue rating to a proposed issue of dollar-denominated senior unsecured notes by Sunac China Holdings Ltd.

The proceeds will be used to refinance its existing debt, S&P said.

The notes are rated one notch lower than the issuer credit rating on Sunac to reflect structural subordination risk, S&P said.

As of year-end 2018, Sunac's capital structure consists of about RMB 203 billion in secured debt and RMB 27 billion in unsecured debt, the agency said.

As such, the company's secured debt ratio is around 88%, which is significantly higher than the 50% issue notching down threshold, S&P said.

The agency said it does not expect the new issuance to significantly affect Sunac's credit profile.

The company is expected to maintain strong sales execution and sustainable profitability while continuing to gradually improve its financial leverage through more controlled spending, S&P said.

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