Moody's rates H3C loans Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating to H3C Holdings Ltd. and Ba2 ratings to the $230 million tranche A 31/2-year senior secured amortizing loan and $200 million tranche B 51/2-year senior secured amortizing loan to be issued by H3C and guaranteed by H3C Technologies Co Ltd.

The outlook is stable.

The agency said H3C's ratings reflect its established position as the second-largest player in the enterprise networking market in China; its capex-light business model, which enables positive free cash flow generation for debt reduction; and its strong research and development capability and regional support network, which underpin its sustainable competitive advantage.

At the same time, Moody's believes a Ba2 rating is appropriate in light of H3C's position as a fast-growing and relatively small company in a global technology context, especially with a short operational track record.

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