S&P rates China Forestry notes B+

Standard & Poor's said it assigned a B+ long-term corporate credit rating to China Forestry Holdings Co. Ltd., along with a B+ rating to its proposed issue of senior unsecured notes.

The proceeds will be used for forestry assets acquisition and general working capital purposes.

The rating is subject to a review of final documents.

The outlook is stable.

The rating reflects the company's small operating scale, short track record as a publicly listed company, and exposure to the cyclicality of the timber industry, S&P said.

The agency said it believes China Forestry's financial risk management is under-tested due to its limited operating and listing history. It also has high execution risk due to its ambitious expansion plan, S&P added.

Factors tempering these risks include a strong demand for wood fiber and timber in China leading to supply shortages, the agency said, and the company's good profitability and quality forest resource base.

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