S&P rates Tencent notes A+

S&P said it assigned an A+ rating to a proposed issuance of senior unsecured notes by Tencent Holdings Ltd.

The proposed notes will be a drawdown under the company's $10 billion global medium-term notes program.

The proceeds will be used for general corporate purposes.

The rating on the proposed senior unsecured notes is the same as the corporate credit rating on Tencent, reflecting the company's very strong cash flow generation capabilities and the minimum priority borrowings in its capital structure, S&P said.

The agency said it expects Tencent to generate strong operating cash flow and maintain strong key credit measures.

The company's adjusted debt leverage was 0.3x in 2016, the agency noted.

S&P said it estimates that the debt leverage will be 0x to 0.3x at the end of 2017, depending on the company's acquisition activity and the amount of cash on the balance sheet at year-end.

The proposed notes issuance does not meaningfully change the expectation and view of Tencent's credit strengths, the agency explained.

The ratings also reflect the company's very strong product offering in online games, social communications, mobile payment and others, S&P said.

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