S&P rates KWG notes B+

Standard & Poor's said it assigned a B+ rating and cnBB Greater China credit scale issue rating to the proposed issue of dollar fixed-rate senior unsecured notes by KWG Property Holding Ltd. (BB-/stable).

Proceeds will be used for financing property projects and for general working capital purposes.

The rating on KWG reflects the company's short operational record outside its home city of Guangzhou, fairly aggressive debt-funded expansion into new markets and exposure to the high-end residential property segment, according to the agency.

This segment is more vulnerable to the Chinese government's home-purchase restrictions and other policy measures to control property prices, the agency said.

KWG's established market position in Guangzhou, satisfactory performance in new markets, and better execution and more consistent financial management than similar-rated peers' temper these weaknesses, S&P said.

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