S&P provides BBB-/cnA- to Hero Asia notes

Standard & Poor's said it assigned its BBB- long-term issue rating and cnA- long-term Greater China regional scale rating to a proposed issue of dollar–denominated senior unsecured notes by Hero Asia Investment Ltd. (BBB/stable/--; cnA/--).

The issue rating is one notch lower than the long-term corporate credit rating on Hero Asia to reflect structural subordination risk associated with the debt at the holding company level. Nevertheless, the agency said it expects the risk to gradually decrease as project companies rely increasingly on funding from Hero Asia or its parent China Longyuan Power Group Corp. Ltd. (BBB+/stable/--; cnA+/--).

Hero Asia intends to use the notes proceeds for China Longyuan's renewable energy businesses, working capital and other general corporate purposes.

S&P said the rating reflects its assessment that the company is a highly strategic subsidiary of China Longyuan. Hero Asia is fully owned by China Longyuan and has a long record of operating as the sole offshore financing platform for the parent. Hero Asia mainly co-invests with China Longyuan in domestic renewable energy projects.

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