S&P rates Sunac China notes B

S&P said it assigned a B long-term issue rating to the dollar-denominated senior unsecured notes proposed by Sunac China Holdings Ltd.

The proceeds will be used to refinance existing indebtedness and for general corporate purposes, the agency said.

S&P also said it rates the senior unsecured notes one notch below the issuer credit rating on Sunac to reflect structural subordination risk.

Sunac's financial performance in 2017 was better than expectations, the agency said.

The agency said it estimates that the company's see-through debt-to-EBITDA ratio, which includes the attributable non-consolidated financials of joint ventures and associates, improved to 15x in 2017, from about 19x in 2016.

S&P said it expects Sunac's leverage to further improve in 2018 because of revenues from strong contracted sales in the past two years, stable margins and reduced appetite for debt-funded acquisitions.

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