Moody's assigns B2 to Kaisa notes

Moody's Investors Service said it assigned a B2 senior unsecured rating Kaisa Group Holdings Ltd.’s proposed dollar-denominated notes.

The B2 rating is one notch lower than Kaisa's B1 corporate family rating due to structural subordination risk. The risk is that the majority of Kaisa's claims are at its operating subsidiaries and, in bankruptcy, have priority over claims against the holding company, the agency explained.

Kaisa plans to use the proceeds to refinance offshore debt.

“The proposed bond issuance will lengthen Kaisa's debt maturity profile and improve its liquidity without having a material impact on its credit metrics, because the company will use the proceeds to refinance maturing debt,” Moody’s said in a press release.

The outlook is stable.

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