S&P rates Kerry notes BBB-

Standard & Poor's said it assigned a BBB- long-term issue rating and cnA- long-term Greater China credit scale rating to the proposed issue of five-year dollar-denominated fixed-rate senior unsecured notes issued by Wiseyear Holdings Ltd., a subsidiary of Kerry Properties Ltd.

The proposed notes will be a drawdown under the $1 billion medium-term notes program that Kerry unconditionally and irrevocably guarantees, S&P said.

The proceeds will be used general corporate purposes, including refinancing of maturing debts, the agency said.

The rating reflects the Hong Kong-based diversified property company's satisfactory recurring income, established brand name in China through key investment property assets and good funding flexibility, S&P said.

Weaknesses include Kerry's weakening profit margin, partially due to the increased contribution from the logistics business and the capital-intensive business model that gradually generates cash flow but requires large upfront capital outlay, the agency said.

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