Moody's rates Golden Eagle bonds Baa3

Moody's Investors Service said it assigned a first-time Baa3 issuer rating to Golden Eagle Retail Group Ltd. and a Baa3 senior unsecured debt rating to its proposed bonds.

The outlook is stable.

Proceeds will be used to refinance debt and fund new projects.

"Golden Eagle's Baa3 ratings reflect its strong market position and established operating track record in affluent Jiangsu Province, where the consumer market is sizable within China," Kaven Tsang, a Moody's vice president, said in a statement.

"The Baa3 ratings also reflect the company's competitive strategy of focusing on the mid-to-upper end-market in second- and third-tier cities," Tsang said.

"Golden Eagle's strategy to take ownership in most of its stores adds to its competitive advantages and offers financial flexibility," Tsang added.

The company's concessionaire model lowers its business and inventory risks, Tsang noted.

"Golden Eagle's Baa3 ratings are also constrained by the company's profit concentration and planned expansion," Tsang said.

Moody's said it expects debt leverage to remain within the Baa3 range in the next 12 to 18 months, with adjusted debt to EBITDA of about 3x to 3.5x.

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