S&P rates Sinochem notes A-

S&P said it assigned its A- long-term issue rating to the dollar-denominated senior unsecured notes issued by Sinochem Hong Kong (Group) Co. Ltd. The issuance will be drawn from the company's $10 billion medium-term note and perpetual securities program. Sinochem Offshore Capital Co. Ltd., a special purpose vehicle, will issue the notes and Sinochem Hong Kong will guarantee them.

“We equalize the rating on the proposed notes with the issuer credit rating on Sinochem Hong Kong (A-/developing/--), because of credit substitution under the guarantee. Although the company's priority debt ratio exceeds our notching threshold of 50%, we do not notch down the issue rating. This reflects our view that Sinochem Hong Kong is a core subsidiary of Sinochem Group, which has a very high likelihood of receiving extraordinary government support, if needed,” S&P said in a press release.

The company plans to use the proceeds for refinancing and general corporate purposes.

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