Fitch: Dongfeng Motor notes A

Fitch Ratings said it assigned a final rating of A to Dongfeng Motor Group Co. Ltd.’s €500 million 1.6% senior unsecured notes due 2018.

The bonds are issued by Dongfeng Motor (Hong Kong) International Co., Ltd., and unconditionally and irrevocably guaranteed by Dongfeng.

The proceeds of the issue will be used to refinance existing debt, Fitch said.

The notes are rated at the same level as Dongfeng’s senior unsecured debt rating as they represent direct, unconditional, unsecured and unsubordinated obligations of the company, the agency said.

The rating considers a three-notch uplift from its standalone credit profile of BBB to reflect the company’s strong operational and strategic ties with the central government through its 66.86% parent, Dongfeng Motor Corp., which is a wholly owned subsidiary of the State-owned Assets Supervision and Administration Commission (Sasac).

Sasac and the central government have demonstrated they are committed to support Dongfeng to become the flagship automobile company in China and are ready to provide strong policy and financial support should it run into difficulties, Fitch said.

The company is well-positioned against its peers in the Chinese automotive market due to its well-established brand portfolio, competitive products offering, extensive distribution network and good relationships with the government, the agency said.

© 2015 Prospect News.
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