S&P rates Lai Fung, notes B+

Standard & Poor's said it assigned its B+ long-term corporate credit rating to Lai Fung Holdings Ltd. and a B+ issue rating to its proposed issue of up to $200 million in senior notes due 2014. Proceeds will be used to finance the acquisition of land and property projects, to renovate existing investment properties and for general working capital purposes.

The outlook is stable.

The rating on Lai Fung reflects the good location of the company's key investment properties, increasing recurring rental income from investment properties and strategic partnership with one of its shareholders, the CapitaLand group, S&P said.

These strengths are tempered by Lai Fung's low liquidity, the small size of its land bank, a volatile operating performance and limited project diversity, the agency said. The company is vulnerable to frequent and unpredictable regulatory changes and the highly competitive and cyclical nature of the property market in China, S&P added.

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