Fitch rates China Orient Asset notes A-

Fitch Ratings said it assigned an expected rating of A- to China Orient Asset Management Corp.'s proposed three-year senior unsecured yuan-denominated notes.

The notes, issued by Starway Assets Enterprises Inc., are unconditionally and irrevocably guaranteed by China Orient Asset Management (International) Holding Ltd., (Coami), which is a wholly owned subsidiary of China Orient Asset.

In place of a guarantee, China Orient Asset has granted a keepwell deed and a deed of equity interest purchase and investment undertaking to ensure that the guarantor, Coami, has sufficient assets and liquidity to meet its obligations under the guarantee for the notes, Fitch said.

The rating on the proposed offshore bond is in line with the ratings of China Orient Asset given its strong linkage with Coami and the keepwell deed, the agency said.

The deeds signal a strong intention from China Orient Asset to ensure that Coami has sufficient funds to honor the debt obligations, Fitch said.

The agency said it also believes Coami intends to maintain its reputation and credit profile in the international offshore market.

A default by Coami could have significant negative repercussions on China Orient Asset for any future offshore funding, Fitch added.

China Orient Asset is rated two notches below the China sovereign, reflecting ownership by the central government and strong operational and strategic ties with the government, the agency said.

Its ratings also consider dilution of the policy role and expected reduction in shareholding by the government, Fitch said.

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