Moody’s: Sino-Ocean bond issue is credit positive

Moody’s Investors Service said that Sino-Ocean Land Holdings Ltd.’s proposed domestic bond issuance is credit positive because it will lengthen the property developer’s debt maturity profile and lower its financing costs.

Sino-Ocean announced Aug. 17 that the China Securities Regulatory Commission approved the company’s plan to issue domestic corporate bonds of up to RMB 10 billion for a maximum tenor of 15 years.

On the same day, the company announced a proposed issuance of up to RMB 5 million in domestic bonds with an expected term of five to10 years and annual coupon rates of 3.5% to 5.8%, subject to market conditions, Moody’s said.

The company said that it would use the majority of the proceeds to repay existing debt and the remainder for other general corporate purposes, the agency said.

The proposed issuance will help extend Sino-Ocean’s debt-maturity profile and further strengthen its liquidity, Moody’s said.

Sino-Ocean has a strong liquidity position, as evidenced by its cash to short-term debt ratio of 146.3% at the end of 2014, the agency said.

This ratio will improve further upon the refinancing of its short-term debt with the proceeds from the proposed domestic debt issuance, Moody’s said.

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